The start of the new financial year saw a surge in the number of retirees investing in buy-to-let property, in a bid to gain better returns on savings.
Letting agents have reported a large level of interest from first-time landlords who tend to be of retirement age and are buy-to-let investors. A recent survey of 20,000 households has indicated a steady increase in the proportion of savers looking to use a buy-to-let investment as a means of funding their retirement years.
Data from the Office for National Statistics shows that 42% of respondents think that investing in property is the secret to secure the largest possible retirement fund. This percentage was up from 32% in 2010.
However, many of these retiree landlords have either limited or no experience of dealing with tenants, thus share many characteristics of accidental landlords.
‘Many retirees are finding they can easily use equity in their residential property or money from a pension pot to fund a deposit. They can also claim tax breaks on mortgage interest and other expenses, so buy-to-let is very appealing,’ commented Peter Armistead of Armistead Property. He believes that the inexperience of retiree landlords will see many tenants getting a raw deal.
Mr Armistead said many of these landlords are, ‘inexperienced in the rental market and may be unaware of the legal, financial and duty of care responsibilities they face. There is a myriad of legislation governing tenanted properties and it is very easy for the uninitiated to fall foul of the law.’
Retiree landlords bad news for tenants?
‘For example, boiler and gas appliances checks need to be done annually for rental properties. Landlords also have a legal responsibility to minimise fire risk with the installation of fire alarms; provisions of fire proof furniture and fire extinguishers; and accessible fire escapes,’ Armistead continued.
Concluding, he said that unless some retiree landlords, ‘take a professional and well informed approach to letting property, it is likely that the quality of accommodation, property maintenance, safety and communications with the tenant will be substandard and may put lives at risk.’
‘Retiree landlords need to take their responsibilities seriously and get expert help to manage their properties. This will ensure they are compliant with all of the legal requirements and that their tenants are managed professionally,’ Armistead added.