A combination of factors has left many people aged between 30-50 concerned about their future retirement income. Research claims that buying to let may be the best retirement strategy…
The loss of most final salary pensions, a lack of confidence in some investment markets and diminishing returns from pension pots when taking a lump sum have left many turning to the buy-to-let market, which continues to offer far greater returns than the majority of other investment options.
A 2016 study by Barclays found that shares offer a 2.3% return over ten years after inflation is taken into account, while Government bonds provide 3% and corporate bonds achieve 1.8%. Cash in a savings account actually loses 1.1% of its value. Meanwhile, investing in property has become increasingly more profitable.
Figures from Sequre Property Investment earlier this year showed that a landlord who buys a property for £100,000 with a £30,000 deposit would achieve a return in excess of 5% each year by 2023.
Michael Cook, the Lettings Director at Romans estate agent, comments: “Incredibly high tenant demand and a lack of housing supply in many parts of the country has pushed rents up and provided buy-to-let investors with a wonderful opportunity to enjoy a significant return.
“In addition to substantial rental income, investors will benefit from capital growth over the medium to long-term. Over the last five years, house prices in the UK have risen by almost 28%, which shows just how committed investors also stand to gain through capital appreciation. While not guaranteed, an increase in value is highly likely based on past performance of the market.”
He continues: “All of this makes property the perfect option for those looking ahead to their future retirement income. Landlords will benefit from a reliable and regular income stream that can be used initially to pay off a mortgage and then to fund their post-work life, while they always have the option of selling up and taking a lump sum to enjoy in later years.
“However, as with any investment, there are risks associated with buying to let, which is why working with an experienced local letting agent is the only way to be confident of picking the right property in the right place at the right time, and using it to ensure a safe and comfortable retirement.”
We also remind all current and prospective investors of the importance of comprehensive Landlord Insurance. With a 5 Star Defaqto rating and 40 essential covers as standard – the widest Landlord Insurance on the market – we ensure that your property is adequately protected.