Pension Changes – A Boon For Agents?
January 22, 2015
With legislation enabling us to draw down our pensions in one lump sum coming into effect from April this year, letting agents should expect the market to be flooded by a wealth of new buy to let landlords from the silver sector. And this dad’s army of mature new landlords are set to offer high street estate agents a golden opportunity.
Vastly different from the portfolio property player, who may have multiple properties under his belt, those who choose to cash in their pension pot for property are smaller scale investors more likely to purchase a single house or flat. But there may be thousands of them.
Of the estimated 200,000 intending to cash in their lump sum this year alone, 32,000 are planning to buy property, according to research by Ipsos Mori, meaning that those buying on the smaller scale will still make a big impact. And experts predict these figures will rise.
While the traditional buy to let landlord may be playing a high stakes game of property monopoly, those who are trading their pensions for property are doing so because they want to make an investment that’s as safe as… well, houses. And with interest rates on savings likely to stay low long term, getting into letting may be the best way for them to make their money work for them.
These new entrants to the rental market from the older generation could be just the rental market needs to rejuvenate, as their hands off approach lends itself to the complete service the traditional letting agent offers. Rather than just relying on an agent to find them a tenant, we predict they will be keen to have their properties managed as well, as well as being open to any other value add options their estate agent can offer them.
As relative newcomers to the property game, they also recognise that they will benefit from any additional insider advice on both buying and letting that an experienced agent can offer.
Likely to treat their new buy to let properties as an alternative type of piggy bank, those pouring their pensions into bricks and mortar will be seeking a slow but steady return on the property they’ve purchased, as well as hoping that its value will increase, as their mortgage decreases.
Remember, however, buying a house at any age is a huge investment and never more so than when you’re sinking the savings for your retirement into it. Estate agents should be prepared for a little extra hand holding for this new market entrant, but also be reassured that for them – like the very clients they’re handling, if they manage the situation well – the returns could be huge.
You May Also Enjoy
Latest developments in Renters’ Rights Bill: What landlords need to know
On the brink of becoming law, the Government last week rejected the majority of amendments put forward by the House of Lords, which would have mitigated the severity of some of the amendments. Property professionals, landlords and tenants are poised to navigate this once-in-a-generation overhaul of housing legislation. Lucy Jones, Chief Operating Officer at…
Read More 
What Will Commonhold Mean for Property Managers?
By Robert Poole, Director – Block Management, Glide Property Management, part of LRG The government’s ambition to end leasehold for most residential properties has put commonhold back into the spotlight. First introduced in 2002, commonhold offered a resident-led alternative to traditional leasehold ownership. However, legal and commercial complexity stalled adoption. Two decades later, policymakers are…
Read More 
Think You Know Mortgages? These 5 Myths Could Be Costing You Money
When it comes to mortgages, most of us have had advice from family and friends. The trouble is, a lot of these so-called facts are myths, with many individuals missing out on better deals or opportunities, due to not doing their own due diligence. Emma Graham, Business Development Director at Hodge Bank, explained: “Mortgages are…
Read More 
Just 17% of homes selling for more than £500k
The latest analysis by eXp UK has revealed that while just 17.4% of homes sold across England and Wales so far this year achieved a price of £500,000 or more, agents in London, the South East, and the East of England will face the greatest need to adapt should the Government press ahead with plans…
Read More 
Estate agents back Rachel Reeves’ stamp duty shake-up but call for abolition without replacement tax
The latest research from GetAgent has revealed that the majority of estate agents in England are supportive of Chancellor Rachel Reeves’ plans to overhaul property taxation by scrapping Stamp Duty Land Tax (SDLT). However, 44% argue that the new levy should be focused only on higher-value homes, while 79% favour abolishing SDLT outright without introducing…
Read More 
First-Time Buyers Prioritising ‘Forever Homes’
A third of first-time buyer purchases are semi-detached properties, as young people turn to ‘forever homes’ Barclays mortgage data shows semi-detached properties rose in popularity in August, accounting for 33.5 per cent of first-time buyer purchases Four in 10 Barclays first-time buyer customers chose mortgages allowing them to complete their repayments over a 30+…
Read More