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Buy-To-Let Being Considered By More Future Retirees For Their Later Years

An income and equity release specialist’s recent research claims that over 10% of the 50 + age bracket, are seriously considering entering into the private rented sector by purchasing a buy-to-let property to fund their retirement.

If this is the case then it could mean that upon hitting retirement there could be 1.3 million new landlords.

From the survey 50% of those who said they could become buy-to-let landlords that what was attractive to them was the potential capital growth coupled with a regular monthly income and 44% stated it would be help increase their retirement income.

More than 30% viewed buy-to-let as a much safer option than ‘gambling’ on the stock market and approximately the same number were expecting it to bring ‘home’ a higher income than savings accounts or pension investments.

22% of the potential landlords had already experienced a positive experience in a buy-to-let investment, and 18% said they were looking forward to enjoying property management.

The potential retiree landlords were undeterred by the stamp duty hikes and the eventual ‘culling’ of the mortgage tax interest relief.

Andrew Tully, pension’s technical director of the firm, said: ‘There are a number of things to consider before embarking on a career as a landlord. First and foremost, a pension is designed to provide an income in retirement, which is usually done either through drawdown or an annuity. People will need to think long and hard before withdrawing significant sums of cash from their pension as any withdrawal over the first 25 per cent is subject to income tax.

He warned: ‘If your main priority is to generate an income then the rental yield from the property may not provide the income you expect. Don’t forget you will also have to manage the property, or pay someone to do so on your behalf.’

Blog Post from PIMS.CO.UK

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