New research by the National Landlords Association (NLA) indicates that only around 5 per cent of landlords plan to use money released from a pensions to fund further buy-to-let (BTL) expansion.
The Chancellor’s plan to give those with pension pots the freedom to access their own funds rather than being compelled to take out an annuity, it was thought, would lead to a rush into BTL, but this has not materialised. The majority just don’t plan to take advantage of pension freedoms to invest in property.
The latest research* by the NLA, UK’s largest landlord association, reveals that of those with a pension in place, just five per cent are planning on withdrawing a lump sum to invest or expand their portfolio.
Fourteen per cent of the landlords questioned said they would consider using a lump sum to invest in further properties, while 11 per cent said they didn’t have enough of a pension to withdraw a lump sum at all. Seven per cent of landlords said they already had other plans for withdrawing a lump sum and 19 per cent were undecided.
Three per cent plan to sell up completely, one in ten (19 per cent) have no retirement provisions in place, a quarter (25 per cent) plan to sell at least some properties and six in ten (61 per cent) plan to live off their portfolio income at retirement.
A third (34 per cent) was undecided when questioned and will assess the market and decide what to do when they reach retirement age.
Further considerations for landlords on deciding what to do long-term will be the tax changes brought in by the Summer Budget 2015
Carolyn Uphill, Chairman of the NLA, said:
“There has been a lot of talk around pensions being used to invest in buy-to-let (BTL) since the announcement on pension freedoms was made last year.
“While the changes may be attractive to those considering a move into BTL, it’s clearly not that popular an option for landlords.
“Those currently in the market already have an asset to use if they want to expand – their property – and therefore, depending on circumstance, will have the means to put a lump sum towards other investments or plans; that is if they want to withdraw it at all.
“The NLA offers invaluable advice, guidance and support for both existing and new landlords to help ensure the smooth and successful running of a letting business. It would be advisable for anyone considering or already planning on using a lump sum from their pension for investment in BTL to look into how the NLA can help.”
*NLA Quarterly Landlords Panel research – Q2 2015 (977 respondents)
Chancellor’s plan to give Pension Freedom to those with Pension Pots – "Not Boosted BTL Significantly" – http://t.co/cSyjAwsRwe
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