Posts with tag: retirement

Renting in Retirement is Becoming an Increasingly Popular Option

Published On: June 27, 2019 at 8:38 am

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There has been a 61% increase in the number of older renters since 2012, according to new research by Hamptons International.

In the last twelve months this has amounted to an 8% increase, with around a third of these renters being retirees.

The estate and letting agent says that retirees are making the decision to swap homeownership for the following reasons:

–      In order to beat high levels of Stamp Duty

–      To free up savings to help family members get onto the property ladder

–      To turn their home into a source of income

Jamie Turnbull, Business Director of Girlings Retirement Rentals, has commented on this research, responding that they have also witnessed a growing trend towards renting in retirement. They expect this will continue as people recognise it can be a good financial option.

Mr Turnbull says: “Selling up and renting can be great way to free up capital in a property which can then be invested to fund retirement or help family out. Renting also saves on stamp duty. Often people are downsizing, but even smaller homes can command high stamp duty costs.

“Renting avoids this and gives people access to all the capital in their house, rather than spending some of it buying a new home. Many baby boomers are sitting on a lot of equity because of rising property prices over the past twenty years and want access to it now so they can really make the most out of their retirement.

“Most of our properties come with assured or ‘lifetime’ tenancies, so people have the same security of tenure they would have if they owned their own home. This can be a big factor when deciding to rent and is why many of our residents have chosen to rent through us in a specialist retirement development.”

Over-55s: The Generous Generation

Published On: November 22, 2018 at 8:58 am

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  • Three out of four over-55s have either already helped, or plan to help out, their children financially
  • 78% of over-55s are worried that, by gifting now, they might run into financial trouble themselves later down the line
  • More than one in five over-55s will provide cash to grandchildren

Average handouts to children and grandchildren

For children, their parents give out an average of nearly £17,000, whilst grandchildren can expect (before inheritance), on average £11,300, according to a study by Key. The money is thought to be given to help with particularly large financial concerns, such as student debt and housing deposits.

Nearly half (46%) of homeowners over the age of 55 have already helped their children out financially, and another 30% plan on doing so. This equates to about 8.6m homeowners helping out the younger members of their families.

Regional focus

Over-55s in the North East are most generous to children, with 94% of grandparents having helped out, or plan to help out, their offspring. For grandchildren, Londoners are most likely to receive financial help, with a total of 34% either planning to, or have already, helped their grandchildren.

Will Hale, the CEO at Key, comments: “The over-55s are truly a generous generation, with many looking to access their housing equity help out their children and grandchildren. Of course, not all over-55s are homeowners and not all can afford to give money, but those who can generally want to.

“Indeed, with more than three out of four planning to help children and one in five helping grandchildren, there is clearly is a real desire amongst this group to support younger generations and a recognition of some of the financial challenges they are facing. Despite recent reports pointing to a growing intergenerational divide, our experience is that families continue to offer financial support when it is needed across the generations.

He continues: “The over-55s have done well out of property wealth growth and many may be benefiting from generous company pension schemes. However, whilst their current financial well-being is enabling them to help out family, there may be worries of over-extending themselves and under-estimating the costs involved in the latter stages of life. Therefore, it is vital that the over-55s seek specialist advice when choosing to access the wealth in their property.”

Nearly Half of Buy-to-Let Investors are Pension Pot Landlords

Published On: October 12, 2018 at 9:28 am

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Nearly half of buy-to-let investors in the UK are so-called pension pot landlords, according to the latest report from Your Move.

The estate agency network’s latest Landlord Survey defines pension pot landlords as those who are over the age of 45 and view their portfolio as a long-term retirement investment.

Over four in ten property owners in the buy-to-let sector class themselves as pension pot landlords, with almost a quarter (23%) of this group having been investors for 15 years or more.

Your Move surveyed 1,071 landlords to learn more about their portfolios, behaviours, and attitudes towards tenants, letting agents and the lettings sector.

Accidental landlords – those who were not planning on becoming landlords – were the second most common type of investor (29%), followed closely by professional landlords (20%).

The survey found that accidental landlords are most likely female and under the age of 45, who are often thrust into the market through inheritance or changes in their personal circumstances.

Professional landlords, on the other hand, tend to be male, over 45-years-old and consider being a landlord as a job or career.

The findings also show that pension pot landlords are more likely than the other groups to live close to their rental properties, with 41% living within 1.5 miles.

Furthermore, nearly three in ten (29%) pension pot landlords see their properties as a business, with over half (53%) investing in more than one property.

However, even though these landlords may be more investment minded, Your Move revealed that pension pot landlords are also more likely than the other groups to build a personal rapport with their tenants and want tenants who will protect their investment.

In fact, 18% said that they like to meet or talk to new tenants before signing a contract, which was the highest proportion of any group. More than half (53%) also felt that it was important that tenants view the property as their own home.

Martyn Alderton, the National Lettings Director of Your Move, comments on the findings: “Our research suggests that the private rental sector is still seen to offer significant opportunities, providing many landlords with a source of income and funding into retirement. It’s also clear that pension pot landlords are keen to build a personal rapport with tenants who will look after their investment.

“As an industry, it’s increasingly important that we continue to support these ties, providing long-term benefits to tenants looking for a property to call their home and also for landlords looking for ways to fund their retirement.”

Retired Homeowners Looking to Downsize Should Consider Renting with Assured Tenancies

Published On: October 8, 2018 at 7:59 am

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A recent nationwide survey from equity release adviser, suggests estate agents have seen a surge in inquiries about downsizing from retired homeowners, with 1.4 million over-65s saying they will consider downsizing in the next five years.

The survey discovered that over two out of five estate agents have witnessed an increase in inquiries from over-65s homeowners looking to downsize in the past year, with the need to save money (80%) the biggest reason for selling, followed by the desire for a more manageable home (78%).

Besides this, other reasons included moving to a more suitable retirement area. and boosting retirement income. However, the survey also revealed that three-quarters of estate agents believe there is a shortage of homes for retired people to move to, while 80% say there is a lack of homes suitable for those who are less mobile.

There is a solution – and that is to rent. According to Gillian Girling, Chief Executive of Girlings Retirement Rentals, more retirees are choosing to downsize and rent in a purpose-built retirement development because of the many benefits it can offer.

Gillian Girling says “Over the past decade, we have seen growing interest in renting in retirement as it allows people to free up capital in their home, move to a smaller more manageable property and not have to pay stamp duty when purchasing a home.
“In our experience the main barrier to renting has always been short term tenancies that don’t provide long term security for people. This isn’t the case with our properties as most are available with assured or ‘lifetime’ tenancies, so people have security of tenure.

“Our homes are designed for independent living but with the added benefit of being part of a community and being able to get involved in social activities with people of a similar age, plus most of our developments have lifts or people can request a ground floor apartment, ideal for people with mobility issues,” Gillian Girling adds.

One lady who decided to downsize and rent in retirement, moved into a one bedroom apartment on an assured tenancy, in a purpose-built retirement development in Wimborne, Dorset in May.

She claimed that there were many benefits of renting in retirement. She doesn’t have to worry about any property upkeep or maintenance, as this managed by the landlord. The apartment is safe and secure, plus there is a house manager on site to check in on the residents, beautiful communal gardens and a communal laundry room.

Janet commented: “I’m very happy renting. I have an assured tenancy which means I can remain here for life if I choose and I don’t have that awful fear of the landlord turning me out. I also find it reassuring that there’s a very capable and caring manager at the development should I need any assistance.”

Gillian Girling added: “Renting in a purpose-built retirement development particularly appeals to single people in later life. Many of our residents are widowed or on their own. They like the fact there is a ready-made community of people of a similar age and they can take part in social activities if they wish.

“Many find it reassuring that all our apartments come with a 24-hour emergency call line in case of emergency, and renting also frees people from the worries of property and garden maintenance. We believe more retired people will be choosing to rent in the future as it can suit their lifestyle as they get older.”

Girlings have a one-bedroom apartment available at Kingsmead Court, Wimbourne where Janet lives for £850 pcm. They also have one-bedroom apartments available at Homewaye House from £725 pcm and Restharrow for £695 pcm in nearby Bournemouth.

NLA concerned about number of people investing for retirement

Published On: July 24, 2017 at 8:49 am

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It has been suggested that the recent alterations to the way that buy-to-let properties in the UK are taxed could lead to a pension crisis, with individuals becoming too reliant on property to fund their retirement.

The National Landlords Association warns that 77% of landlords, equating to roughly 1.8 million, are reliant on their buy-to-let investment in order to fund their retirement.

Retirement Planning

Findings from recent consumer market research from Mintel indicate that buy-to-let is still a safe way to save for retirement years, with 68% of people of this opinion.

This said, figures from the Office for National Statistics suggest that the average retired household spends £21,770 each year. This leaves a shortfall of over £15,000 after taking the full basic state pension of £6,359.60 into consideration.

In order for this shortfall to be made up, one would require savings of around £300,000. The National Landlords Association feel that this is why so many people are turning to property.

Richard Lambert, Chief Executive Officer of the National Landlords Association, observed: ‘As a consequence of government policy over recent decades almost two million people are reliant on their property to fund their later years. But the changing tax regime will substantially reduce the income they receive from these investments and so compromise the retirement plans of a significant number of hard working people.’[1]

NLA concerned about number of people investing for retirement

NLA concerned about number of people investing for retirement

Retiree Landlords

Mr Lambert went on to say: ‘Some 27% of UK landlords are already retired and 37% are aged 55 or over, so there is a pressing need to tackle these issues without delay.’[1]

As a result, the National Landlords Association is calling on the Government to assist those affected to adjust their financial plans by tapering the total amount of capital gains tax landlords pay when selling their property. This, the NLA hopes, will be based on how long they have owned and let their property out for.

Lambert explained: ‘Landlords who have invested in residential property for the long term are different from short term speculators who buy and develop properties, and this should be recognised when it comes to how much capital gains tax they pay when they decide to sell.’[1]

‘It is not always in the best interests for landlords to continue to manage residential property into later life. A capital gains relief like we propose would provide an incentive to sell, allowing people to sell poorly performing properties and potentially purchase an annuity or invest in more liquid, lower risk assets to fund their retirement instead,’ he concluded.[1]

[1] http://www.propertywire.com/news/uk/uk-landlords-body-voices-concerned-number-relying-buy-let-retirement/

Just 186,000 Homes are Left for 2m Elderly Homeowners

Published On: March 27, 2017 at 8:47 am

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Categories: Property News

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Just 186,000 Homes are Left for 2m Elderly Homeowners

Just 186,000 Homes are Left for 2m Elderly Homeowners

Last week, we reported that retired homeowners are cashing in on property wealth at the expense of struggling first time buyers. But there may be a very obvious reason for this – elderly homeowners have no smaller homes to move to.

In its Right-Size Report, Inspired Villages found that Britain’s elderly homeowners are not moving from their family homes because there’s a severe lack of variety and quantity of retirement housing stock.

The research found that, in total, there are around 720,000 homes across various retirement housing types in England and Wales – enough to house just 7% of the nation’s elderly homeowners.

The Right-Size Report, which maps the supply and demand of Britain’s retirement housing, also found that 1.8m elderly homeowners who would normally leave their family homes can’t because there is nowhere suitable for them to move to.

If you are looking to move, however, Portsmouth is the best place to consider, as it has the most retirement housing units for ownership.

Hyndburn and Caerphilly are the worst, with the fewest number of units available.

A quarter (25%) of people say they would like to invest in a retirement property, despite there being only enough units for 2.7% to do so.

And housing supply is definitely the problem – since 2000, while the older population has grown, as few as 5,500 retirement housing units per year have been built on average.

Using this data, Inspired Villages mapped the supply and demand of Britain’s retirement housing, considering what it could be like in 20 years’ time as a result of the country’s rapidly ageing population.

While it certainly appears that Britain’s elderly homeowners would like to move into smaller properties to free up homes for younger first time buyers, it doesn’t look like a likely solution until the country’s housing stock rapidly increases.