With new rules on accessing retirement savings due to come into force in less than a month, the UK buy-to-let market is bracing itself for a surge of prospective landlords ready to invest their pensions into property.
The pension reforms, announced last year, abolish the requirement for converting a pension pot into an annuity, and leave people free to do whatever they like with their retirement cash. The reform is due to come into force on April 6.
Jeremy Leaf, estate agent and fellow of the Royal Institute of Chartered Surveyors, told the BBC’s Today programme this morning that large numbers of people were already inquiring about investing in buy-to-let property. So many, in fact, that it “could have a distorting effect” on the market, he added.
Industry magazine Property Reporter today quoted data by Hargreaves Lansdown as showing that that around 200,000 individuals were planning to cash in their entire pension pot. Around 16 percent are planning to reinvest their pension in property, with the UK’s already booming buy-to-let market looking like a tempting alternative for many of those who are new to property investment.
Ray Withers, Chief Executive of specialist property investment company Property Frontiers, told Property Reporter that the UK’s pension holders were “finally being given the freedom to spend their life savings as they see fit”.
“Now, retirees can choose to make their money work for them however they wish and the UK's buy-to-let sector looks certain to be one of the beneficiaries of the situation,” he added.
The UK buy-to-let market has seen rapid growth in the past few months. In February, new research from Connells Survey and Valuation showed that the UK buy-to-let sector had experienced a 37 percent increase in activity since December, as compared with more conservative growth elsewhere in the residential property market.