New buy-to-let (BTL) mortgage borrowing has “fallen off a cliff” among older landlords amid higher interest rates, new data shows.

According to UK Finance, 7,980 “later life” BTL loans, including those for house purchase and re-mortgaging, were handed out in the final quarter of last year. This was less than half the 16,930 loans advanced for this purpose to over-55s in the same period in 2022.

Later life BTL loans in Q4 2023 represented around 22% of all BTL mortgages.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “New buy-to-let mortgages have fallen off a cliff among older landlords, with the number of these loans halving in a year.”

“Given that older people makeup more than a fifth of all buy-to-let loans, this has a wider effect on the broader market. As more older people decide that being a private landlord isn’t as rewarding or as tax-efficient as they had hoped, it means they’re selling up, which puts more pressure on rising rents again.”

“The more positive news is that the pressure has been easing since these figures were released and lower mortgage rates will have taken less of a toll in recent months. However, falling mortgage rates have stalled more recently, as the market digests the fact that inflation is more stubborn than they expected. It means we can’t rely on swift rate cuts to get us out of trouble financially in retirement,” she added.