With the recent unlocking of rules on how people can access their savings in retirement, could a new breed of ‘buy to let pensioners’ be ready to enter the local property market in Teddington?
Just last week I was asked again by someone who follows the Teddington Property Blog, but who hasn't yet ventured into the buy to let market, my opinion on the Chancellors budget announcement that savers will be allowed to withdraw their entire pension fund from the age of 55 or over, rather than take the money slowly as an annual income. That got me thinking, particularly about the property market in Teddington, and whether buying an investment property really is the best way to make your well earned money work for you in retirement. Needless to say, I'm not an expert in pensions but I do know property and so am happy to share my thoughts on the subject....
Recent surveys report that buy to let has outperformed other mainstream investments, so it could be an attractive option for those wanting to safeguard their capital and maximise income during retirement. Yet, whilst this may be the case, I strongly believe that anyone considering their first move into the sector must take professional advice.
Buy to let continues to offer great opportunities, but potential investors must have a clear strategy, and it should never be considered as a ‘get rich quick’ scheme.
Tracker studies indicate that since its introduction, buy to let investment has provided an average return of 16.3 percent – considerably more than most other asset classes. And don't forget, that takes into account the whole country and so the figures in Teddington should easily exceed this.
Over a third of Britain’s 1.4 million private landlords already view their portfolio as the main component within their pension plan – with the relative ‘safety’ of bricks and mortar investment combined with regular rental income making it an attractive investment choice.
The Chancellor’s recent pension reforms have ignited a great deal of interest in buy to let as a viable and attractive alternative to more traditional pension plans. Market demand for quality, well maintained, private rental property remains high and even before the recent Budget announcement I have definitely seen a growing number of enquiries from people seeking advice and guidance on how to enter this sector for the first time.
Some industry commentators are predicting returns of around 11 percent per year over the next decade and a number of specialist buy to let lenders have started to reconsider current age restrictions to allow people up to age 70 to apply for long term buy to let mortgages – subject to them meeting certain criteria.
It is important for first time investors to buy property at the right price, in the right location and to identify the type of accommodation that people will want to rent from them both now and in the future. With my local knowledge I can look in detail at potential property ‘yields’ - taking into account all outgoings, such as maintenance costs - and provide novice investors with a realistic expectation on returns. I am happy to sit down and talk to anyone wanting to learn more about becoming a successful property investor.
Rebecca Smith
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