Half of landlords are using property as pension

A new report claims that almost half of the landlords across Britain are ‘pension pot’ landlords.

The report by Your Move defines a pension pot landlord as a person over 45 years of age who view their property portfolio as a long term retirement investment.

Property owners

Four in ten class themselves this way and 23% have been property owners for 15 years or more.

But the ranks of the pension potters were swelled in 2015 when the new pension freedoms allowed savers to withdraw as much of their savings as they wished.

Buy-to-let

Thousands looked at the poor returns available via banks and building societies and decided they could make more money by investing in property and the buy-to-let explosion followed.

Pensions expert Andrew Tully said: “The buy-to-let market looks set for a boom fuelled by the pension freedoms and in the process it will create a new generation of landlords.

“As a nation, our interest in property remains, despite a cooling of the buy-to-let market following the recent tax changes.”

Looking to invest

Experts say 10% of people either approaching retirement or already finished with work are looking to invest in property, despite the recent tax changes and tighter regulations.

Martyn Alderton of Your Move said: “Our research suggests that the private rental sector is still seen to offer significant opportunities, providing many landlords with a source of income and funding into retirement.

“It’s also clear that pension pot landlords are keen to build a personal rapport with tenants who will look after their investment. As an industry, it’s increasingly important that we continue to support these ties, providing long-term benefits to tenants looking for a property to call their home and also for landlords looking for ways to fund their retirement.”

Research

The company’s research showed more than 40% of pension pot landlords live within five miles of their rental properties.

Three in ten consider their properties to be a business and 53% of them had invested in more than one property.

Long term

Mortgage broker David Hollingworth said: “People are investing over the long-term and it is, therefore, not surprising that they see property investment as part of their pension pot.

“In the past, there has been concern that landlords would be dumping stock at the first sign of a downturn, but, in the Financial Crisis, that didn’t transpire and people stuck with it – People were instead looking at the income they could generate from rental income.”

Professional and accidental

The Your Move survey found two other types of landlord in the market-place – professional and accidental.

Professional landlords were found to be predominantly male, over the age of 45 and considered what they do as a job or career.

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Second largest

Strangely they form only the third biggest grouping – just 20%. Pension potters are the largest grouping at 40%, but the second largest grouping, at one in three, are the accidental landlords.

These are people who are most likely to be female and under the age of 45. They are often thrust into the market via inheritance or other changes in their personal circumstances.