A survey by a leading landlords association revealed that most property investors plan for retirement rather than the present day when they look to expand their portfolio.
The National Landlords Association (NLA) questioned over 500 of their members in the last quarter of 2011 to get the statistics and they do reflect figures from at least one Government department. Over 80% of the respondents said they now saw their property portfolios as their main income in retirement as they had lost all faith in conventional saving because of the dire financial situation in the UK.
This backs up figures from the Department of Work and Pensions who in the same period reported a drop in people taking out private pensions of 8%. There is no doubt that interest rates are no help at all for people looking for a safe, but rewarding place for their cash at the moment whereas the private rental market is booming. Property investors in many parts of the UK have never had it so good.
David Salusbury, chairman of the NLA, viewed the situation thus: “Landlord confidence in the financial market is at an all-time low. This combined with record low interest rates means that many individuals are looking for alternative ways to secure their financial future. Private-residential property can be a sound long-term investment for those planning their retirement. But potential landlords must realise that letting property is a lot more complicated than contributing to a pension.”
He went on: “Becoming a landlord is just like starting any other small business. Anyone considering using property to bolster their pension plans must make sure that they put together a long-term business plan, taking account of the various regulations governing the letting of property including adequate property insurance, as well as their responsibility to tenants.”