UK buy-to-let sector braces for surge in silver landlords as pension freedom day approaches
- 54% of people see property as a better investment than a pension (Property Moose)
- 16% of those taking their entire pension pot plan to put it into property (Hargreaves Lansdown)
- Liverpool buy-to-let property available to silver landlords from just £64,950 (Property Frontiers)
As March marches onward pensions freedom day is drawing ever closer and the UK buy-to-let sector is tingling in anticipation of a surge of silver landlords ready to put their pensions into property. The pension reforms due to come into force on 6 April 2015 will represent the biggest shakeup to the way retirees manage their future for decades.
While nobody can say for sure what the impact of pensions freedom day will be, indications are that around 200,000 individuals are planning to cash in their entire pension pot, according to Hargreaves Lansdown. Some 21% intend to spend their hard earned savings on a holiday, while 13% plan to pay off debts and 12% will use the money for home improvements.
Around 16% plan to reinvest in property, with the UK’s already booming buy-to-let market looking like a tempting prospect for many of those who are new to property investment.
The timing of pensions freedom day could not be better for those wishing to become silver landlords. A survey published by Property Moose last year found that 54% of respondents felt that residential property was a better investment option than a pension, versus 11% who saw a pension as the better option. Now, that 54% have the chance to put their opinions into practice.
Ray Withers, Chief Executive of specialist property investment company Property Frontiers, is looking forward to April with anticipation. He comments,
“It’s excellent news that the UK’s pension holders are finally being given the freedom to spend their life savings as they see fit. Too many have been trapped in annuities over the years that mean they have to spend their retirement watching every penny. Now, retirees can choose to make their money work for them however they wish and the UK’s buy-to-let sector looks certain to be one of the beneficiaries of the situation.”
Buy-to-let opportunities in and around London are in abundance, but many pensioners may not be able to afford the price premium that the capital commands, or may wish to spread their funds across several lower priced properties rather than just one in London. For these buyers, the UK’s second tier cities provide some excellent opportunities.
In Liverpool luxury apartments in the sought after L1 postcode area of the city centre can be snapped up from £64,950. Property Frontiers is offering 91 studio suites and one bedroom apartments in the iconic former Reeces Ballroom building (where John Lennon held his wedding reception), in a fully managed investment opportunity with 6% net yield assured for five years.
In Belfast, where brisk market conditions saw price rises of 4.9% in the past year according to ONS figures, buy-to-let properties in the strategically located development at The Sandford can be had from just £108,100. With Northern Ireland’s house prices still around 45% below their 2007 peak based on ONS figures, many silver landlords will be looking to play the long game and enjoy capital growth with a Belfast property, as well as regular rental income.
The full impact of pensions freedom day will only be known months or even years from now, once the dust has settled, but in the near future, the buy-to-let sector and all those who are a part of it are bracing themselves for a surge in those looking to put their pension into property in order to turn it into pounds.
For further details, visit www.propertyfrontiers.com or call the team on +44 1865 202 700.