Posts with tag: retiree landlords

Many retiree landlords dependant on rental income

Published On: April 15, 2016 at 10:37 am

Tags: Buy-to-Let,buy-to-let income,landlords,rental yields,retiree landlords

A new survey conducted by Responsible Equity Release reveals that a majority of buy-to-let investors of retirement age are reliant on their rental income.

Almost three-quarters of buy-to-let investors over 65 said they would struggle to make ends meet if they did not have their rental income to cover them.

Boosts

According to the survey, 81% of landlords of retiree age stated their rental property provided a much needed boost to their retirement income. Low interest rates are thought to be hitting a lot of retiree landlords hard.

The survey quizzed over 1,000 retirees about their experiences of owning a buy-to-let property. An overwhelming majority of 92% said that they were concerned about changes to mortgage interest tax relief and the potential impact this would have on their rental yields.

In fact, the buy-to-let tax alterations have left a number of landlords considering their future in the sector. 41% said though their buy-to-let investment was a positive source of income, they are seriously thinking about selling up.

Many retiree landlords dependant on rental income

Life saver

Steve Wilkie, managing director at Responsible Equity Release, said, ‘for many pensioners, having a buy-to-let property has been a life saver in this low interest environment. While their savings have languished, earning very little interest and pension income has been hit hard by falling share prices, property income has remained strong.’[1]

‘Without the income boost from their buy-to-let, many would really be struggling to make ends meet. But the Chancellor has yet again ignored UK’s retirees when he announced changes to the way buy-to-let would be taxed,’ Wilkie continued.[1]

Mr Wilkie went on to say, ‘George Osborne was so focused on taxing the rich, he forgot that a new tax on buy-to-let won’t just hit the wealthy, it will also hit those honest, hard-working people, who may have a single buy-to-let property and were just hoping it would earn them a little extra income in retirement.’[1]

[1] http://www.propertyreporter.co.uk/landlords/majority-of-pensioner-landlords-reliant-on-btl-income.html

Retirees still investing in buy-to-let

Published On: February 23, 2016 at 10:10 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,landlords,rental market,retiree landlords

A new assessment on buy-to-let investment has revealed that retirees are still looking to purchase in the sector.

Data from a report by Fidelity International indicates that retirees putting tax free cash from their pensions into buy-to-let has remained constant during the last year. This is despite the forthcoming tax changes.

Alterations

On April 6^th 2016, a buy-to-let investor will be permitted to pay an extra 3% stamp duty in comparison to residential buyers. In addition, higher-rate tax relief on mortgage interest will be cut from April 2017, to the basic rate of 20%. As such, landlords will be able to claim less for wear and tear suffered in their properties.

However, these changes have done little to dispel retirees’ appetite for buy-to-let investment. Fidelity International said that 7% of their retirement customers used their tax-free money to invest in a rental property during January. This was the same proportion seen in the last six months of 2015.

In all, property purchases remain popular with retirees, making up 14% of all usages of tax-free pension money during 2015. This percentage has typically been split 50/50 between buy-to-let and owner-occupier purchases.

Retirees still investing in buy-to-let

‘No Brainer’

‘The British love affair with all things property is well-documented and for many retirees, buy-to-let is seen as a no brainer investment given the spectacular rise in property markets, particularly in London, over recent years,’ noted Maike Currie, investment director for personal investing at Fidelity International. ‘Tax changes aside, the illiquidity of the housing market as well as costs in the way of maintenance, stamp duty, mortgage arrangement fees and a host of unpredictable outgoings can chip away at income. Not to mention the time and effort required to manage a property and the risk that it may lie empty between tenancies,’ she continued.[1]

‘Investing in property funds allows investors access to an income stream without the hard work and unexpected costs of a tangible property. Buy-to-let in retirement may work for some but with the added extras that come with it, it’s worth asking yourself whether you really want to be managing a property in your eighties?’ Currie concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/2/retirees-love-affair-with-buy-to-let-continues

Retiree landlords bad news for tenants?

Published On: September 10, 2015 at 11:59 am

Author: Em Morley

Categories: Landlord News

Tags: buy-to-let landlords,retiree landlords,tenants

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.

Boom

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.[1]

However, many of these retiree landlords have either limited or no experience of dealing with tenants, thus share many characteristics of accidental landlords.

Concern

‘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.’[1]

Retiree landlords bad news for tenants?

Tasks

‘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.[1]

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.’[1]

‘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.[1]

[1] http://www.propertyreporter.co.uk/landlords/are-retiree-landlords-bad-news-for-tenants.html

Rise in Retiree Landlords

Published On: July 13, 2012 at 10:09 am

Author: Em Morley

Categories: Landlord News

Tags: pensioner landlords,retiree landlords

New figures seem to suggest a growing number of over 65s are buy-to-let landlords.

Rise

Rise in Retiree Landlords

Statistics from insurers Simply Business assessed in excess of 300,000 landlord insurance quotes. Their findings indicate that retiree landlords were up 11% this year to date, in comparison to 2011 and up 33% since 2009.[1]

The figures indicated a rise in the number of female over 65s renting properties, with a rise of 43% in comparison to 2009.[1] Many elderly people are choosing to let out their previous homes, due to the poor state of the housing market. With property becoming increasingly difficult to sell, more and more people chose to keep their existing property when downsizing.

Single properties

A very large majority, 93%, of pensioner landlords own just a single rental property. Findings from Simply Business also suggest that 74% of retirees have let out their property for in excess of three years.

At the other end of the rental scale, the number of landlords aged between 18-25 has fallen by 38% during the past three years.

The CEO of Simply Business, Jason Stockwood, said that it was unsurprising that more people were choosing to rent out their properties. Stockwood expressed: “In today’s economic climate, choosing to rent out your property rather than sell immediately has been a good option for many when looking to move, and with the current squeeze on pensions, this is proving a good source of income for people of retirement age.”[1]

He went on to say: “Buy-to-let can be a tough marketplace to enter,” but there is “a great deal of support available for those looking to take the plunge.” This in turn has led to a number of accidental landlords choosing to stay in the market for longer and continue to make financial gains.

[1] http://www.landlordtoday.co.uk/news_features/Sharp-rise-in-pensioner-age-landlords