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Massive boost for buy-to-let market after budget 2014….

March 28th 2014
By: Melanie Hollidge

With George Osborne overhauling pensions and announcing that no longer will people be forced to take an annuity (an insurance policy that turns pension saving into retirement income) now giving people instead cash from their pension pot as a lump sum. This will mean another wall of money being funnelled into the housing market which in turn if supply levels stay at today’s volumes mean yet further rises in house prices will be on the cards.

We have already seen the property market boosted by the Government help-to-buy mortgage scheme and the latest news will only fuel the situation further. This number that potentially could be released from people’s pension pot could be as much as £120 billion. The other likely potential use for the money is that pensioners who still have mortgages in place could use the lump sum to pay off their mortgage debt. With annuities costing large sums of money and often with high commissions being paid and yielding low incomes the buy-to-let market place would be the obvious choice.
 
Strong yields in the buy-to-let market place means people can enjoy a healthy income and generous tax breaks as the ability to off-set mortgage interest, property maintenance and management costs against rental income is yet more reasons for investors to go down this route. An added bonus could also be for pensions to be able to pass on buy-to-let assets to their children as annuity products only pay during the life-time of the individual. This has got to be great news for the UK property market.

If you would like to find out more about the buy-to-let market then why not pop into your local branch of Goodfellows or give us a call on 0845 372 7070.