More investors see property as a pension


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With a growing number of people becoming disillusioned with pensions and bank saving rates at an all-time low, more investors understandably now see their properties as a means of funding future retirement, research shows.

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More investors see property as a pension

  1. 1. More Investors See Property As A PensionWith a growing number of people becoming disillusioned with pensions and bank savingrates at an all-time low, more investors understandably now see their properties as ameans of funding future retirement, research shows.According to a survey conducted by BDRC Continental, 61 per cent of landlords plan tolive off the rental income from their investment properties, 20 per cent will sell some ofthe properties in their portfolio, whilst five per cent intend to dispose of all of theproperties in their portfolio to fund retirement.Mark Long, director at BDRC Continental, said: “Landlords consistently tell us that theysee their property portfolio as forming a critical part of their pension provision for thefuture. On average, landlords intend to remain active in the rental sector for another 15years or so, and see a combination of capital gains and rental income as underpinningtheir pension strategy.”With research showing tenant demand increased by seven per cent in the third quarter ofthis year and average yields increasing 0.5 per cent to 6.7 per cent, it is not surprising thatmany private landlords view property to be a safer bet than other investments such aspensions.Adam Feather, managing director of Robert Anthony estate agents, says that his companyhas seen a sharp increase in the number of people looking to invest in properties in thecapital, particularly from people overseas, with houses and flats for sale in Little Venice,Regents Park, Primrose Hill, Marylebone, Hampstead and Baker Street provingparticularly popular.
  2. 2. “Property prices in central London and the areas surrounding it are expected to edge upfaster in the next few months as the supply and demand imbalance becomes even morepronounced,” Feather said.The problem facing many tenants is that the supply of houses and flats to rent inPrimrose Hill, Regents Park, Marylebone, Baker Street, among a host of other highlydesirable areas are in short supply, which in turn is pushing rents higher as aconsequence; an attractive proposition for existing landlords and investors looking toacquire properties in those areas.
  3. 3. Andrew Ellinas, director at leading estate agents Sandfords, commented: “We expect aninflux of both investors and immigrants including French bankers and entrepreneurscoming over here for the more business-friendly environment. This invasion on twofronts will boost both ends of the market, with lettable flats at the lower end beingsnapped up by investors and large family homes being in demand from business peoplelooking for somewhere to live.”Any investor looking to take advantage of high demand for houses and apartments torent in Marylebone, Primrose Hill, St Johns Wood, Baker Street, among other highlydesirable districts, by acquiring property, may wish to consider Neil Yong’s ‘10 minuterule’.Young, founder of property investment firm Young Group, has personally accumulated aprivate property portfolio collectively worth around £10 million. Geographically, all ofYoung’s investment properties are located in London, where prospects for capital growthand high rental returns are generally good. He says he would not consider buying outsideof London or even abroad as it does not fit in with his strategy.Young has adopted what he refers to as his “10 minute rule”, which means that he onlybuys residential properties which are located within close proximity to good transportlinks and amenities.“I’m primarily only interested in properties that are situated within 10 minutes walkingdistance to good transport links, particularly a tube station, food stores, bars andrestaurants, as these facilities are generally in high demand from tenants.”Wherever you choose to invest in property, always ensure that you conduct all necessarydue diligence prior to investing.