More than half of landlords view BTL properties as a ‘pension’

More than half of landlords view BTL properties as a ‘pension’

10:35 AM, 6th September 2022, About 3 weeks ago 4

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Landlords that have reached the state pension retirement age of 65 are generating a net income of more than £10bn, according to new research.

The findings come from property consultancy Savills who have analysed the latest English Private Landlord Survey and found that more than half (54%) of landlords in England are using buy-to-let properties as a ‘long-term investment to contribute to their pension‘.

Additional analysis from Savills also reveals that retirement-age households own 1,491,000 buy-to let-properties worth an estimated £437 billion.

After deducting outstanding mortgage finance, these properties add £378bn to the net wealth of these households.

Use of property as a pension is expected to grow

And, despite tougher conditions for landlords, the use of property as a pension is expected to grow, with 1 in 10 (11%) of those approaching retirement expect that property will be their biggest source of retirement income.

This increases to 1 in 5 (20%) among the self-employed.

And a further £346 billion worth to buy to let stock is held by households that are due to retire in the next 10 years.

As such, residential investment income is set to become an increasingly important contributor to a landlord’s pension pot in the coming years.

‘Attractive way to supplement or build up retirement savings’

Lucian Cook, Savill’s head of residential research, said: “Buy to let investment has been an attractive way to supplement or build up retirement savings over the past 20 years, especially for the self-employed.

“Many are proclaiming that the golden age of buy-to-let investment is over because of increased regulatory requirements, a higher tax burden and the prospect of further increases in the cost of debt.

“But it is set to play an increasingly important role in providing pension income, with many landlords, who were at the forefront of the buy-to-let explosion of the noughties, now hitting or approaching retirement age.”

‘Older landlords have accumulated significant housing wealth’

He added: “Older landlords, in particular, have accumulated significant housing wealth through their investments.

“That means that they are in a good position to weather the storm as economic conditions toughen, being well insulated against interest rate rises.

“As a result, they will be an important source of private rented accommodation for younger households, especially as more heavily leveraged Landlords find it more difficult to make the sums add up.”



Comments

Mick Roberts View Profile

12:32 PM, 7th September 2022, About 3 weeks ago

A pension that soon the Govt will say:

Mr Mrs Landlord No, u not having your pension back that you've saved years for. It's now not moving back to u, tenant staying there, u not allowed to sell. And we freezing the rent too. We know you've gone without for years to get to this stage, but if we do this, we get more votes. I know even more tenants will be worse off next year cause of this, but it's about votes.

Beaver

10:10 AM, 12th September 2022, About 2 weeks ago

Reply to the comment left by Mick Roberts at 07/09/2022 - 12:32
It is about votes; left wing governments like attacking both pensions and property because they see them as the preserve of the 'rich'.

In reality whether they are attacking buy-to-let, attacking pensions directly or attacking principle private residences via e.g. IHT, they are still attacking pensioners and their children.

Mick Roberts View Profile

17:12 PM, 25th September 2022, About 19 hours ago

Yes they do think we all Rich greedy landlords.
Not coming to ask us & our tenants what they think.
I've been renting 3 bed to gal £565, been with me 15 years or so, in this house 10 years. Buying a house. New gal is paying £850. We do look after long term tenants.

We have gone without to start with. No one just came & gave us the house.

Yes many Landlords are pensioners, human beings, sometimes got the house to help the tenant out. And they now hurting this pensioner who often wants to sell, but only keeping it for current long term tenant.

Beaver

12:44 PM, 26th September 2022, Less than a minute ago

Reply to the comment left by Mick Roberts at 25/09/2022 - 17:12
I know that's how they see it.

But I know people who are plumbers and electricians and IT technicians who own and rent out property. I also know people who either work in the public sector, or have worked in the public sector but are now retired who own and rent out property. They do it partly as a pension and partly for their kids. And they do it not just to supplement their private pensions (or replace them if they haven't got them) but also to supplement their own state pensions *and* their public sector pensions.

There's nothing evil about it; it's an entirely responsible thing to do to plan not to be a burden on the state when you are old: They are also taxed on it and the truth is that they are taxed unfairly on it.

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