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31 Jul

Property industry set for ‘grey invasion’

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From April this year, more and more pensioners are expected to invest in property. Many on the verge of retiring will look to the sector as a new way of making money – something they may not have considered before. Such a change is attributed to more financial freedom afforded by Government pension reforms inspiring investment in buy to let properties. Neil Woodhead, founder of Ready Rentals, an online support service for private landlords, says: “We have noticed a greater interest from in becoming a part of the buy-to-let market in response to the new legislation. "Some of these 'silver' clients are looking to release money from their pension and others have had money tied up in bonds that are coming to an end." Other silver buyers are approaching the buy-to-let market from another interesting angle when it comes to funding their retirement – these are creating a "piecemeal portfolio", having previously purchased a single large buy-to-let property and, in light of the changes in the market, are diversifying by selling the property to buy two or smaller rental properties instead. The reasoning behind this move is a decision to purchase cheaper properties in areas where long-term capital growth is not as substantial but shorter-term rental yields are. Mr Woodhead said: "One client has sold a modern flat for £160,000 (originally bought for £110,000) and has now purchased two one-bedroomed flats in a cheaper area instead for £28,000 each. This move has ensured that his rental per month has in fact grown from £550 to £730. "Upon retirement, he originally had the view to sell the property and reinvest in a pension fund but instead took the option to change tack. He could see greater benefits in looking for regular rental income rather than longer-term capital growth and his story provides a good example of how those of retirement age are now looking at bricks and mortar differently." It certainly seems to be a growing trend. A recent survey by Platinum Property Partners revealed that a third of those heading for retirement are considering purchasing a buy-to-let property or properties.

Read 1563 times Last modified on Friday, 04 September 2015 13:34

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