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* of their
money to invest in options such as buy to let property,” says Phil Pinkney who co
owns the Belvoir office on Bridge Street in Andover.
“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.
Greg
Greatbatch, Belvoir Andover co owner, 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.
Phil Pinkney
of Belvoir Andover 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 property lettings experts, 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.”
To arrange a FREE and no obligation discussion with our Buy to Let specialist, please contact us on 01264 366611 or email us at: andover@belvoirandover.com
