Pension freedoms will fuel the buy to let market as over 55s access their pots to acquire residential property, despite Government moves to dampen down the market predicts Retirement Advantage.
The annuity and equity release provider has published research showing 13 per cent of people aged 50 or over are likely to invest in property after they retire, potentially create 1.3m new landlords, despite the introduction of new rules restricting tax relief on mortgage interest and increasing stamp duty for individuals buying second properties.
Half of those surveyed said the prospect of capital growth as well as a regular income was a key reason for considering buy-to-let. The research found 36 per cent of over 50s think property is a safer place for their money than investing in stocks and shares, with 35 per cent also think it provides better returns than leaving the money in their pension or putting it in the bank.
The survey found 22 per cent of over 50s polled had already experienced success at being a landlord, while 18 per cent said they were interested in residential property and would enjoy the process of rental management.
Retirement Advantage pensions technical director Andrew Tully says: “The buy-to-let market looks set for a boom fuelled by the pension freedoms and in the process will create a new generation of landlords. As a nation our interest in property remains despite a cooling of the buy-to-let market following the recent tax changes.
“If a person’s main priority is to generate an income then the rental yield from the property may not provide the income expected. There is also the need to manage the property, or pay someone to do so.
“With most people’s main asset being their home, the old adage of having all of your eggs in one basket has never been truer when it comes to pensions and property.”