It has been revealed in a new government report the popular asset class. That the majority of the UK’s landlords choose to invest in UK property with the intention of it forming part of their pension pot. Even during the slower periods, the ongoing price rises have made the property a popular asset class among investors who want to cash in on capital gains later in life.
Long term investment
The latest English Private Landlord Survey have found that this trend is still dominant among investors. More than half (54%) see their properties as ‘a long-term investment to contribute to their pension’. When looking specifically at buy-to-let landlords who invest in UK property, this rises to 58% who intend to keep their property or properties until retirement age.
Accidental landlords
43% are individual landlords who own just one rental property. This could be so high due to accidental landlords, those who inherit a property, or are in a position to keep one when they move house and end up renting it out. This represents around 20% of tenancies. Almost a fifth (18%) of landlords own five or more properties, which makes up 48% of tenancies. It is likely these landlords invest in UK property to make up all or most of their income.
Capital appreciation
You can gain a profit by buying a property at a discount, completely refurbish it then reselling it shortly after, however this method of investment is much higher risk. It often also doesn’t benefit from the natural capital appreciation that takes place over time. Those who invest in UK property for a long-term investment often see the greatest gains over time. There are also a number of costs involved when buying and selling, such as stamp duty and legal fees, that cut into the profit with each transaction.
Positive strategy
Another way to provide an ongoing income during your retirement is keeping your buy-to-let once you are retired. However, you do have to bear in mind that being a landlord does entail work, and if you cannot do this you might have to hire someone to help.
If you are a landlord or thinking about becoming one, give us a call today we can help and advise you every step of the way with your buy to let mortgage.
