Retirement Boost Through Investment Properties Less Popular

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Current homeowners are less likely to boost their retirement income by becoming property investors or downsizing their homes, according to new research from Retirement Advantage.

The research was conducted as part of Retirement Advantage’s new report Home is Where the Wealth Is. The report asked people who likely they are to consider purchasing a new property in order to rent it out in order to provide them with retirement income. Just 35 per cent of respondents said that they were likely to consider it, whilst 62 per cent said that they were unlikely to.

This is a significant change from the far narrower split of 49-51 per cent recorded this time last year. The shift is further pronounced for over 55s. Just 10 per cent said that they would enter the buy to let market, in contrast to the 87 per cent who said that they wouldn’t. Last year this proportion stood at 27 per cent to 73 per cent.

However, Retirement Advantage found that whilst there was a marked decline in new landlord enthusiasm, a substantial number of existing landlords remain. As many as 900,000 landlords are estimated to be over 55.

Head of Product and Marketing at Retirement Advantage, Alice Watson, said: ‘The reduced appetite for entering buy to let is no doubt a reaction to new stamp duty surcharges on investment properties, and the gradual removal of mortgage tax relief. However, predictions of buy to let’s demise would be premature. There are still nearly a million landlords over 55 and for those landlords, there are innovative new mortgage options available to increase ways to boost income from investment properties. At the same time, we know that downsizing is becoming less popular, not least because the fees associated with selling up and moving can be much higher than expected.’

She continued: ‘Property can still play a significant role in providing retirement income, though. Indeed, there is a pressing need for it to do so, as pensions and other savings are increasingly unlikely to meet many people’s retirement expectations on their own. There is a real opportunity for advisers to help clients understand other ways property wealth can be accessed – routes which mean clients can stay in their home and still pass them on to next of kin.’

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