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?
We advise you be vigilant following 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.
Recent surveys report that buy to let has outperformed other mainstream investments, so it could be an attractive option for those wanting to safeguard their capital and maximise income during retirement. Yet, whilst this may be the case, we believe that anyone considering their first move into the sector must take professional 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.
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 percent – considerably more than most other asset classes.
Over a third of Britain’s 1.4 million private landlords already view their 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.
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 percent per year over the next decade and a number of specialist buy to let lenders have 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.
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 our experienced, highly trained specialists can advise on all aspects of property investment and management. We are happy to sit down and talk to anyone wanting to learn more about becoming a successful property investor.