Trend in let­ting out your home

Rutherglen Reformer - - Property - Lor­raine Howard

One in five over 55s are con­sid­er­ing buy­ing their ideal re­tire­ment home now and let­ting it out un­til they re­tire.

New re­search has iden­ti­fied a trend of ‘buy-to-let-to-re­tire’ among peo­ple over 55.

Ac­cord­ing to the re­sults of the study car­ried out by Pru­den­tial, a lead­ing provider of pen­sion sav­ing and re­tire­ment in­come so­lu­tions, one in five ( 20 per cent) over- 55s are con­sid­er­ing buy­ing their ideal re­tire­ment prop­erty now but let­ting it out un­til they are ready to move in when they re­tire.

The trend of ‘buy-to-let-to-re­tire’ ap­pears to be chal­leng­ing the tra­di­tional route of sim­ply sell­ing up and down­siz­ing as a one-off prop­erty deal on re­tire­ment.

Of those over-55s who have al­ready made a buy-to-let in­vest­ment, nearly one in three (32 per cent) said they had done so to se­cure a prop­erty to live in one day.

Many of those look­ing to buy their ideal home for re­tire­ment will ex­ploit the changes to pen­sion reg­u­la­tions that came into force in April 2015.

More than half ( 52 per cent) of over-55s look­ing to ‘buy-to-let-to- re­tire’ said they would con­sider us­ing a lump sum from their pen­sion sav­ings to fund all or part of the pur­chase of their ideal re­tire­ment prop­erty.

Mean­while, Pru­den­tial’s re­search also found that some older peo­ple ‘buy-to-let-to-be­queath’.

Just over one in six (17 per cent) over- 55s with ex­ist­ing buy- to- let in­vest­ments said they chose to in­vest in bricks and mor­tar so they could hand down a prop­erty to a loved one in the fu­ture.

The find­ings also high­light the pop­u­lar­ity of buy-to-let gen­er­ally among older peo­ple in the post­pen­sion free­doms world.

Nearly three in 10 (29 per cent) over-55s sur­veyed said they planned to make a buy-to-let in­vest­ment in the next two years. Of those over-55s plan­ning a buy-to-let in­vest­ment, seven in 10 (70 per cent) said they would be in­vest­ing in the sec­tor for the first time.

Stan Rus­sell, a re­tire­ment ex­pert at Pru­den­tial, said: “The ad­vent of older peo­ple opt­ing to buy-to-let-to re­tire is an in­ter­est­ing de­vel­op­ment, and in a post-pen­sion free­doms world its ap­peal is un­der­stand­able.

“How­ever, there are a num­ber of risks in­volved for any­one look­ing to take money from their pen­sion sav­ings, ir­re­spec­tive of the rea­sons.

“The sim­plest ap­proach for most peo­ple look­ing to give them­selves choices and se­cure their ideal home when they re­tire is to save as much as pos­si­ble into a pen­sion as early as pos­si­ble in their work­ing life.

“The Govern­ment’s Pen­sion Wise ser­vice pro­vides free and im­par­tial guid­ance.”


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