Landlords 'using property to fund retirement'
by Sarah Ashcroft
The majority of private landlords in the UK believe that their property portfolio
will fund their retirement instead of a pension, research from BDRC Continental has revealed.
Statistics collated by the organisation revealed that more than 80 per cent of proprietors believe this is the case, with four-in-five people in this profession planning to live off their income in later life.
Other landlords who answered the independent Landlords Survey revealed that they plan to sell either some (20 per cent) or all (five per cent) of their buildings in order to enjoy a substantial cash payout when they want to stop working.
The findings reflect an ongoing trend noted in the buy-to-let sector, where investors are increasingly attracted to longer-term returns, rather than capital growth from increasing house prices.
It comes after the Council of Mortgage Lenders found that one in eight mortgages are now buy-to-let loans, representing the highest level of this type of product since records began.
They now account for 1.44 million of the 11.3 million mortgages in the country, compared with 275,500 ten years ago.
In addition, the HomeLet Rental Index released earlier this week stated that the average rent across the country increased in the last three years from £679 per month in October 2009 to £790 at the moment.
However, proprietors have been urged to rethink their decisions not to save for retirement, as many could overlook the maintenance and running costs that come with letting a property.
Commenting on the results, director at BDRC Continental Mark Long, said: "Landlords consistently tell us that they see their property portfolio as forming a critical part of their pension provision for the future.
"On average, landlords intend to remain active in the rental sector for another 15 years or so and see a combination of capital gains and rental income as underpinning their pension strategy."
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Published on: November 16, 2012
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