Interest in buy-to-let market as pension changes come in
THIS month pension regulation changes allowing people aged 55 and over to access part or all of their pension pot will come into effect.
At a time when stocks remain volatile and interest rates are low, the prospect of owning a rental property that provides a regular income and appreciates in value has plenty of appeal.
Recent research has revealed that one in three 45 to 64-year olds with a pension would consider using some or all of their pension to fund a buy-to-let property as an alternative to a more traditional pension fund.
These potential landlords – or ‘silver landlords’ – have widely varying reasons for investing in property, with nearly 43 per cent interested in a regular income; 23pc are attracted by the perceived security of the investment and 17pc by the expected capital appreciation*.
The UK private rented sector (PRS) has seen significant growth in the last two decades, having doubled since 1996.
There are now an estimated two million private landlords in the UK who own and rent out 4.4 million homes – that’s almost one in five homes across the country**.
Ewan MacPhee, owner of Northwood Macclesfield, said: “We are seeing a lot of interest from potential ‘silver landlords’ looking for an appropriate buy-to-let investment.
“In response to the new legislation the opportunities for those approaching retirement to invest in property are opening up in a way that has never been possible before.
“Encouraged by both steady gains in capital appreciation of property and increasing tenant demand, it’s easy to understand why buy-tolet is considered an attractive alternative to the more traditional pension funds.
“However, whilst many potential landlords will appreciate the basic concept of investing in bricks and mortar, it is vital to understand that any property purchased for rental purposes needs to be treated as the investment it is.
“The key to successfully letting out a property is to find the tenant demand first, and then the property that will meet that demand. This is where the expertise of an experienced, knowledgeable local agent is invaluable.
“They should be able to guide you on locations that are worth investing in, find appropriate properties and give you an estimate of the rental income you could achieve.”
Ewan has four top tips to help those looking to invest in buy-to-let with their search: