‘Silver landlords’ now looking at UK Buy to Let
Pension reforms introduced in April 2015 have lead to letting agents predicting that with as many as 400,000 ‘silver landlords’ over the age of 55 now able to cash in their pension, approximately 40,000 will opt to invest in a second property as a buy to let investment. This could ultimately lead to growing numbers needing to employ the services of professional letting agencies.
So what does this mean for the UK property market?
Experts say the pension reforms will lead to a significant increase in the number of new BTL investors seeking advice form letting agents. This could lead to both positive and negative outcomes. On the one hand should predictions come true we can expect to see first time buyers being challenged as ‘cash rich’ investors beat them to the post with faster purchasing power often winning in negotiations. Certainly estate and letting agencies throughout England will be hoping for an avalanche of enquiries from new buy to let investors looking for property management companies. On the other hand we could see a significant increase in house prices only helping to fuel a new boom to bust cycle – something none of us really want to see again for some time.
Traditional savings versus buy to let investment
With such a large scale change in pension arrangements comes a big decision for many. As with most things in life, deciding what to do with a sudden ‘windfall’ (even when it has been hard earned) can be difficult. The temptation to simply start spending is great. Most of us have been brought up to save for our retirement and so when faced with how to invest a large sum of money will typically look for the very best return from a savings account.
However, for the uninitiated, becoming a landlord is a whole new learning curve and requires a great deal of commitment and dare we say it, risk. Compared with simply leaving a lump sum in a savings account being a landlord means having to deal with an ever-growing list of Government regulation and all that goes with ensuring you meet all of your legal duties. And then there are the responsibilities to the tenant in terms of providing a safe and warm property. Good letting agents will be in demand if newbie landlords are to enter the market in large numbers.
Our thoughts as letting agents in Nottingham
For what it is worth, we believe the number of people that will opt to cash in their pension and subsequently invest in UK buy to let will be far less than predicted. Buy to let is not without it’s complications and risks and represents hard work.
Are you thinking of investing in buy to let? Do you have questions over what is really needed to become a successful landlord? If so, please feel free to call one of our team today on 0115 981 9651.