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COULD 2015 SEE THE RISE OF 'BUY TO LET' PENSIONERS?

Could a new breed of 'buy to let pensioners' be ready to enter the local property market?

With the recent unlocking of rules on how people can access their savings in retirement, could a new breed of ‘buy to let pensioners’ be ready to enter the local property market?

Nationwide property lettings specialist, Belvoir, is advising caution in the wake of the Chancellor’s Budget announcement that savers will be allowed to withdraw their entire pension fund from the age of 55 or over, rather than take the money slowly as an annual income, such as an annuity.

“Since the last Budget many financial commentators have speculated that following the new rules – due to come into effect from April 2015 – pension savers could draw down some or all[1] of their money to invest in options such as buy to let property,” says Rick Flay who owns the Belvoir! Sheffield office on Campo Lane in Sheffield

“With recent surveys reporting that buy to let has outperformed all other mainstream investments over the past 18 years, this could be an extremely attractive option for anyone wanting to safeguard their capital and maximise their income in retirement.

“Whilst this may be true, we believe that anyone considering their first move into the sector should take expert advice.

“Buy to let continues to offer great opportunities, but potential investors must have a clear strategy, and it should never be considered as a ‘get rich quick’ scheme.”

Subject to conditions
This year marks the 18th anniversary of the buy to let mortgage initiative launched by the Association of Residential Lettings Agents (ARLA). Tracker studies indicate that since its introduction, buy to let investment has provided an average return of 16.3 per cent – considerably more than most other asset classes.

Over a third of Britain’s 1.4 million private landlords already view their buy to let portfolio as the main component within their pension plan – with the relative ‘safety’ of bricks and mortar investment coupled with regular rental returns as income, making it an attractive investment choice.

Rick comments: “The Chancellor’s recent pension reforms have ignited a great deal of interest in buy to let as a viable and attractive alternative to more traditional pension plans.

“Market demand for quality, well maintained, private rental property remains high and even before the recent Budget announcement our offices throughout the UK were experiencing a growing number of enquiries from people seeking advice and guidance on how to enter this sector for the first time.”

Some industry commentators are predicting returns of around 11 per cent per year over the next decade and a number of specialist, buy to let lenders have also started to reconsider current age restrictions to allow people up to age 70 to apply for long term buy to let mortgages – subject to them meeting certain criteria.

Rick adds: “With all the excitement generated by the new reforms we would recommend that anyone looking to use pension savings to fund a buy to let investment should – as a first step - take professional financial advice and then sit down with a property lettings specialist, such as Belvoir, to map out a strategy for their future goals.

“It is important for first time investors to buy property at the right price, in the right location and to identify the type of accommodation that people will want to rent from them both now and in the future.

“With our local knowledge we can look in detail at potential property ‘yields’ - taking into account all outgoings, such as maintenance costs - and provide novice investors with a realistic expectation on returns.

“There are many legislative and other issues to take into account but all Belvoir local offices are staffed by experienced, highly trained specialists who can advise on all aspects of property investment and management.

“We are happy to offer a free initial – no obligation – consultation to anyone wanting to learn more about how to become a successful property investor. And for those who do decide to invest their pension funds into property we can provide a full range of management and other services to ensure their new alternative pension investment is a trouble free one.”

Belvoir! Sheffield is the one stop specialist for Sales and Residential Lettings and Property Management, Investment and Wealth Management Advice, Fit-outs and Renovations, Property Insurances and Mortgages. Belvoir! Sheffield was the winner of the Belvoir Franchise of the Year Award for 2013 and is a multi award winning agency.

For more information, please visit http://www.belvoir.co.uk/letting-agents-sheffield or call 0114 331 0033. Alternatively, please email rick@belvoirsheffield.com

For the most uptodate information relevant to landlords, vendors, and buyers of owner occupied and But to let property in Sheffield ensure you follow Belvoir! Sheffield on either Facebook Twitter or visit our website at http://www.belvoir.co.uk/landlord-information or for selling tp://www.belvoir.co.uk/property-sales-sheffield-p4147

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