More landlords are turning to buy to let to fund their retirement, according to a new survey.
Findings from landlord lender BM Solutions/BDRC Continental report show that of the single property and portfolio landlords questioned, 84% view their rentals as a supplementary pension income.
Around 60% of these landlords said they are actively planning to live off their rental income in retirement.
Another 40% said rental property is their pension and will wait until retirement to decide whether to hold or sell. Few said they intend to sell all their properties when they hit retirement.
Phil Rickards, head of sales at BM Solutions, said the private rental sector is still an alternative long-term investment for later life and this is not expected to change. Rental yields have dipped slightly, but remain strong, he added.
The survey also shows that rental yields fell by 0.5% to 6.2% in the last quarter of 2012. The average yields over the year were 6.7% in the third quarter, 6.2% in the second quarter and 6.2% in the first quarter. This slight variation does not appear to cause any concerns in the market.
Regionally, the East Midlands showed the strongest performance with an average 7.1% return, whereas landlords in Yorkshire and Humberside saw the lowest yields at 4.6%.
Tenant arrears dropped from an average 3.3 tenants behind with rent payments in the third quarter to...
2.4 tenants in the fourth quarter. The average amount owed per tenant was £2,613 in the final three months of the year, up by £247 over the previous quarter.
Void periods fell to the lowest level for more than a year, with just a third of landlords reporting void periods in the final quarter, a 4% decrease over the previous three months and a 13% fall compared to the fourth quarter of 2011.
The average length of void periods also dropped to an average of 60 days. The highest proportion of void periods was seen in the North East at 53%, and the lowest in Central London at 20%.©LandlordZONE® – legal content applies primarily to England and is not a definitive statement of the law; always seek professional advice. Legislation changes, so check dates on these articles. If you have questions go to the LandlordZONE® Forums