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Silver Landlords

Tuesday, 6th January, 2015

With tenant demand continuing to outstrip housing supply, a number of landlords are planning to add to their UK property portfolios by purchasing home across the country in 2015, especially as fas as so-called "silver landlords" are concerned.

New research by Direct Line for Business (DL4B) reveals that 32% of people aged 45 - 64 with a pension would consider using some or all of their pension pot to fund a buy-to-let property as an alternative to a more traditional pension fund.

The study highlights that there could be a sharp rise in the volume of "silver landlords" entering the market following the changes in pension regulation which means that from April 2015, people approaching retirement and pensioners will be able to access as much or as little as they want from their pension pots.

Buy-to-let is becoming an increasingly attractive option for people as it can deliver some great returns in the long-term.

Given the recent pension liberation announcement, for some it could be good to diversify their investments when approaching retirement, but landlords need to seek advice and ensure they understand the returns that property can deliver and especially the tax implications.

The research shows that 43% of potential "silver landlords" would consider investing in buy-to-let property on the basis that it produces regular income.

Some 23% are attracted by the perceived security of the investment, 17% by the expected capital appreciation and 9% of potential buy-to-let investors favour the investment because they would like to invest in something that will allow them to leave an inheritance to their children.

The research highlighted the perceived high returns available for landlords as those approaching retirement anticipate an average yield of between 10% and 14% on their investment. 

"Buy to let can be a flexible investment, providing an immediate source of income as well as being a long term asset. As such, it is understandable that people approaching retirement age are considering investing their pensions in property," says Derek Andrews, our Managing Director.

However, prospective landlords should understand that buy to let does not come without financial risk. Legal expense for repossessions and potential damage to property are but just a few of the costs that can take significant chunks out of a landlords' annual yield.


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