Around 53 per cent of retirement savers say they would consider investing or are already investing in buy-to-let to increase their income in retirement, new research from specialist mortgage lender Kensington shows.
Nearly one in 12 (8 per cent ) of people aged 40 and above say they are already investing in buy-to-let while another 45 per cent say they would consider putting some money into property to fund their retirement.
People in the 55+ age group are slightly less likely to mull over a buy-to-let investment or already have made one – around 48 per cent say they would invest in buy-to-let and 8 per cent have already become landlords.
The pension freedoms that came into force on 6 April are giving a lot of people the opportunity to take a lump sum out of their defined contribution (DC) pot and use it for investments. Buy-to-let is deemed a good opportunity for securing regular income during retirement.
Kensington‘s research found that more than a fifth of savers (21 per cent) regret or are unsure about saving into pensions to fund retirement despite the launch of new pension freedoms.
Nevertheless, the wide support (78 per cent of respondents) was for saving into pension.
Steve Griffiths, head of sales and distribution at Kensington, comments:
“The launch of pension freedoms has led to a lot of excited talk about the potential boost for buy-to-let with thousands of retired landlords rushing to set up in business.
“With so many people unhappy with pension saving there is a need for alternative approaches but buy-to-let will not be right for everyone and anyone planning to do so needs to get advice from a broker as well as advice on other issues including tax.
“The fact is buy-to-let is already a strong and growing market with more than 1.63 million mortgages worth around £188 billion representing around 14% of the total mortgage market and there is plenty of advice available as well as lenders willing to lend.”
