A leading figure in the buy to let broker industry has called for would-be ‘pension pot’ landlords to seek advice before committing pension funds to property.
Andrew Turner, chief executive of Commercial Trust Limited, says: “I firmly believe that, despite a lot of recent change in the industry, buy to let remains a sound investment option. Further investment in BTL properties is excellent news for the industry, the housing market in general and for tenants, particularly at a time when demand for rental properties is currently outstripping supply.”
However, he says professional financial and tax advice should be sought by new investors, particularly pensioners.
Turner’s comments followed the release of a new survey from Retirement Advantage, which found that of 1,005 people aged 50 or older, who have not yet retired and have some form of private pension savings, some 13 per cent intend to invest in property once they reach retirement.
If reflected in wider society, that means an additional 1.3m buy to let landlords in the coming years.
Those surveyed indicated that they perceived buy-to-let to be an attractive method of attaining capital growth on their investment, with 50 per cent looking to receive a regular income from rental properties and 44 per cent aiming to boost their retirement income.
“There is good reason why shrewd people are seeing the appeal of buy-to-let mortgages. However, there are no guarantees regarding future interest rates or returns from property, pensions, bank accounts or stocks and shares. Rules introduced by the government over the past couple of years have also brought significant change to the cost of buy to let and landlords have seen enormous taxation upheaval” warns Turner.
He adds that separate legislation means there are a number of requirements that landlords have to meet such as the health and safety of their property and a tenant’s right to rent in the UK.