Number of “granlords” set to rise
Investors are looking for more clever ways to subsidize their pensions
The number of property investors planning to use their pensions to fund a buy to let purchase looks set to increase, according to recent research.
Property website, Rightmove, has found that house prices are increasing month on month and is expecting a further increase after the new pension changes take place in April. The expected rise is thought to be down to the number of “granlords” looking towards buy to let property and driving the prices up.
The changes to pensions allows anyone over the age of 55 to have complete access to their pension pot, which has resulted in a significant increase in interest for those wanting to cash in their pensions to purchase buy to let property. Industry professionals have already noted a demand of investors over 55 interested in high-yielding, city centre apartments.
Research conducted by Sequre found that 52% of those approaching retirement would choose to invest their pension into a buy to let property instead of an annuity.*
The upcoming changes appear to have had a domino effect on the way UK fund their retirement as reports released this week have found that 58% of 18-35 year olds aren’t currently saving for a pension at all.
Further to this, last week’s Budget announcement saw the Chancellor allow a further 5 million people access to their pension who had already purchased an annuity, as concern was raised by those who wanted pension access but had already unwillingly committed to a taxable retirement income.
What does sequre say?
Graham Davidson, Managing Director of Sequre Property Investment, comments on the new wave of first time investors:
“There is no doubt the pensions reform will be positive for the buy to let market, and we are already seeing a healthy amount of first time investors in or nearing their retirement who have taken a keen interest in property investment. The fact that requests are already coming in for high-yielding city centre apartments is promising to the industry as it shows that these new investors have done their research and know what type of property is best for their retirement.”
“Buy to let has always provided better returns than most other forms of investment, so it’s no surprise that these individuals are taking advantage of the new freedoms and putting their money somewhere that is likely to provide them with a better financial future than an annuity.”
If you’d like more information on the pension changes and the buy to let market, contact Sequre today on 0800 011 2277 or email [email protected] to request a free copy of our property investment guide.
*This rate was given alongside the suggested prospect of purchasing a hands off buy to let property with no management obligations. Sequre asked 1,000 45-54 year olds their opinion on two investment examples, an average £100,000 annuity returning £3,470 p.a compared to buying a £100,000 property as an investment, returning a net £7,000 p.a