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Buy-to-let facing pension pot boom

Up to 500,000 savers looking to take advantage of new rules on cashing in on pensions could enter the buy-to-let market. With this in mind, the Evening Standard’s Steve Lodge addresses the market and the benefits those cashing in pension pots might find in such investments. He cites data from Paragon Mortgages which shows that between 1996 and 2013, landlords of mortgaged buy-to-let properties made an average of 16.3% a year. Data from Savills shows that landlords have made over £177m in capital gains in the past five years. It is noted, however, that the London market may not offer as fruitful an investment in coming years, with figures from LSL Property Services showing that rental yields are at 4.3%, their lowest since 2008.

Source: Evening Standard

Open borders and talk of a population rising to 75m: “Help to buy”: pension freedom: historically low interest rates: all contribute to a perfect storm which sees house prices continue their stratospheric rise and ensures that the prospect of home ownership recedes further and further into the distance for millions of young people: perhaps the greatest of the coalition government’s failings but one to which none of the aspirants to government seems to offer any credible solution. Even more worrying, perhaps is that what goes up must come down, somewhere, somehow: let’s hope for a soft landing.

David Whiscombe

Consultant

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