New Generation

February 12th 2015
By: Jon
New Generation

There is a new generation of landlords joining the buy-to-let market.  Pensioners are looking to invest in property to fund their retirement.

According to a recent study by YouGov and investment adviser Old Mutual Wealth, 11% of people approaching retirement currently plan to buy a second home to rent out – compared to 6% of pensioners who currently rely on this form of income.

The reforms to annuity rules which come into effect in April will allow ‘baby boomers’ to withdraw their pension as a lump cash sum – it’s expected that they will purchase flats to rent out to provide them with a regular income and long term investment.

There are pressures on this generation to help their children get on the property ladder or help them move up. As a result, they are more likely to consider downsizing and then reinvesting the sums released – either way, there is more movement in the lower end of the market which then gradually pushes prices up.

Although historically people have chosen to hold onto their family homes, attitudes and financial changes have forced people to rethink, and many people are now using the values tied up in their property to help them fund their retirements.