In line with latest Government’s guidelines on home moving, the housing market remains open, and all our offices in England, Scotland and Wales continue to operate. Health and safety remains our main priority, and we continue to follow a number of strict measures to protect our customers and staff. More information

Older Homeowners Moving into their Buy-to-Let Properties

Older Homeowners Moving into their Buy-to-Let Properties
Buy-to-let has become a realistic alternative for older people who want more from their savings and pension pots. Research by Prudential shows that 20pc of over-55s would consider making a buy-to-let investment with the intention of living in it in the future, and 32pc who already have a buy-to-let will move into it instead of downsizing.

52pc said they would use their pension to fund an investment, considering the increased appeal of rental income and capital gains over the benefits of a pension annuity as part of that opinion. April 2015's pension reforms allowed people to take out an unlimited lump sum, with 25pc of any withdrawal tax-free. Taking into account the longer-term benefits of a property, a surge in interest was expected from older workers and pensioners.

This didn't happen as quickly as planned, though the number (and value) of pension annuities sold in 2015 fell dramatically from £3.1bn in Q1 of 2013, to just £1bn in 2015. The number of pension drawdowns increased at the same time. Pension drawdowns are when someone takes money from their pension and treats is as an income. These grew to £1.3bn last year from just £670m in 2014. So, though there wasn't a significant increase in pensioner investors, there was definitely a material change in how pensioners are using their pension pots.

However, last year's pension reforms have been joined by the new stamp duty levy on second homes, so we may see is a more measured response from pensioners and those reaching the traditional retirement age, and a steady stream of wealthy investors moving into smaller scale buy-to-let portfolios. Given interest rates and increasing life-expectancy, pensions now need to last a lot longer and with fewer saving benefits. Becoming a landlord in retirement age will not be deemed 'too ambitious' for those looking to invest, and they are the most likely to be in a financial position to make investments. Contact your local Martin & Co officetoday to find out more about buy-to-let investments and the property market in your area.