Property investment increasingly becoming first choice as pension hedge.

June 18, 2014

Property has long been a popular choice for people looking to create wealth and income for their retirement.

However, it seems that more  people than ever are now turning to bricks n’ mortar as a pension solution.

Figures from the latest Rent Check report,  produced by Allsop LLP and BDRC Continental, reveal that 78% of existing landlords consider their investment property as their pension pot.

The survey, which measured the actual rents agreed by 2,203 landlords who are members of the National Landlord Association (NLA), has highlighted the private rented sector as a viable long term investment, thanks to the combination of stable rents, increased income security, capital gains and long average tenancies (2.6 years).

It was recently reported that the value of property owned by Britain’s growing army of buy-to-let investors is fast approaching the value of the entire workforce’s pension savings built up over decades of employment.

With the value of buy-to-let currently at £1.25 trillion, it is fast catching up on the £1.6 trillion total amassed in workers’ pension schemes.

And while traditional pension saving is complex and unpopular with many, the phenomenon of buy-to-let is now growing at its fastest rate ever – low interest rates, rising property prices, and improved availability of BTL mortgages all adding to the attractive mix.

Following Government intervention which allows people to access lump sums from their pensions from May 2015, investment in property is expected to rise as over 50’s seek alternative ways to secure their future. Generation Landlord reveals that property is already a popular investment for UK pension planners, with almost eight in ten existing landlords considering their property as their pension.

On average, landlords outside of London take home £4,493 per annum per property, losing 26% of their headline rent to expenses incurred in the running and managing of their properties.

Here, at Northwood, we have been long time advocates of understanding the true cost of being a landlord. (See our “True cost of letting” calculator).

Many new landlords just look at the headline/gross rent and do not factor in such costs as voids, property maintenance, and professional fees that can eat into any profit.

Some novice landlords also fail to understand that getting involved in BTL means taking on the risk of a tenant not paying the rent.

It is our belief that the true way to wealth in property is to have a long term outlook and seek to minimise void periods by retaining good tenants.

We can help landlords achieve this in a number of different ways, one of our most popular options being Guaranteed Rent.

Our Guaranteed Rent service is particularly popular with landlords who have busy day jobs and just want their investment properties “ticking along” in the background.  It’s a low risk and low hassle way to get involved in property and is a genuine “let and forget” solution.

Whichever of our three different levels of lettings options you decide to choose, you can be assured of first class service.

This recent testimonial for our Derby branch shows how Northwood reduce the hassle of being a landlord and assist in ensuring your BTL property achieves optimum performance:

“I have been dealing with Northwood for many years.

As a owner of numerous buy to lets and experiencing an assortment of managing agents, I find that my rents from Northwood are always paid on time followed by a regular monthly statements.

The managers Karen & Wendy have taken personal interest when marketing the properties and most importantly selecting the best tenant at optimal rent.

Tenancy issues are dealt promptly and effectively hence reducing the tenant turnover and associated costs”.

Find your nearest Northwood office >>> here.

Related content:

The lights are all on green for property investment 

*DOWNLOAD our free guide:  How to find a professional letting agent*

Northwood is one of the largest and most recognised lettings agents in the U.K. and the leading supplier of Guaranteed Rent to give landlords complete peace of mind.

Find us on Twitter @northwoodUK or visit our YouTube Channel.

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