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The rise of the silver landlord

The rise of the silver landlord

Category: Buy To Let

Updated: 07/07/2015
First Published: 07/07/2015

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Knowing how you'll secure a comfortable retirement is one of the cornerstones of financial planning, but it seems that attitudes towards the preferred method of getting the necessary income are changing – and there's a growing tendency to consider buy-to-let.

Planning ahead

According to research from Progressive Property, 30% of over-50s surveyed are actively saving for a comfortable retirement, with 13% already having amassed £50,000 or more to go towards it. However, 25% think that they're missing out on lucrative opportunities by leaving their money languishing in a traditional savings account, with such low rates being cause for concern.

This figure rises to 27% when looking across all age groups, despite 61% actively choosing to put money away in a savings account. This perhaps explains why 38% feel that property is the safest option for making a return on their money, with 42% saying that they'd choose to invest in property if they had the money.

Those who are close to retirement are even more inclined to see property as a safe investment, with 69% of respondents aged 50+ believing this to be the case. In fact, 33% have already invested in property, and of those who are actively building up their savings, 10% said that the money will eventually go on a property that they can buy outright to let out.

Silver landlords – be prepared!

The dream for many is to be able to retire comfortably without needing to rely on the state pension, and by all accounts, investing in property could be one way to realise that ambition. However, it's important to weigh up the risks involved, as becoming a landlord isn't always that simple!

For example, landlords will have to invest in different kinds of specialist insurance, and they'll need to make sure they're properly registered for tax purposes, too. Things like capital gains tax, inheritance tax and the future value of the property can also affect overall profits, and then there are void periods and difficult tenants that need to be added into the mix.

Progressive Property's survey found that people would be more confident in taking the leap to property investment if they knew the level of risk attached, what the best locations to invest in are, the potential profit and sell-on value of their chosen property, and the administrative and legal processes and implications, which highlights the importance of carefully researching the area before you take the plunge.

And that's before we even get to things like buy-to-let mortgages! This sector of the market typically asks borrowers to be able to give a higher deposit than for residential mortgages, with buy-to-let (BTL) deals above 80% loan-to-value being few and far between. Rates generally aren't as low and there'll often be higher fees to pay, but that being said, it could be a small price to pay for the potential returns on offer.

It all comes down to doing your research and being suitably prepared, and if everything's in order, there's nothing to stop you from adding to the ranks of silver landlords to create a valuable retirement income stream.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.