Pension reforms to give a boost to buy-to-let investment

Changes in UK pension laws could send ripples throughout the UK property industry, as a generation on the verge of retirement considers how they can best make use of their newfound financial freedom. The new legislation, which was announced by Chancellor George Osborne in December 2014 and is set to come into effect in April 2015, has been described as ‘Britain’s biggest pension reform in decades’.

The legislation states that from April onwards, anyone approaching retirement age will have complete control over their pension funds, enabling them to withdraw as much of their allocated pension pot as they choose to and use the funds as they see fit.

Analysts predict that these new changes could provide a significant boost to the York property market, especially the buy-to-let market. With its high yields and solid performance in this popular city, it is sure to prove an attractive investment for the so-called “silver landlords”.

Recent research by Direct Line for Business has predicted that 32% of people aged 45 to 64 with a pension are considering using it for a buy-to-let property.

Scott Littlefair explains: “These ‘silver investors’ may be attracted by the regular income that such an investment property can provide, to diversify their investments from stocks and shares, or because of the perceived security it represents. Others might be interested in the expected capital appreciation, or because they would like to invest in something that can ultimately be passed onto their children. Whatever the reason, we’re likely to see a significant surge in interest from people who have lost faith in alternative investments and want to seize an opportunity which has not been available to them before.”

Indeed the property market has by far outperformed annuities in recent years and is the fastest growing investment sector.  However, buy-to-let doesn’t come without risk and it is important that anyone considering this type of investment seeks professional advice in relation to tax implications, the legal responsibilities of being a landlord and maximizing the return on your investment.

We are in a position to help with all these questions and uncertainties and want to ensure that your transition into the buy-to-let investment market is hassle free and a success.

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