With all the headlines about inadequate pension provision and planning, it’s no surprise that here at Property Options we see a considerable number of investors wanting to use property as a source of retirement income.
We’re not alone as the findings from the latest BM Solutions/ BDRC Continental survey show – more and more landlords who previously looked primarily for long term capital growth, are looking instead at rentals to help their finances in retirement.
Here are some of the key findings from the survey:
- Of the single property and private portfolio landlords surveyed, 80 percent view their property investments as a supplementary income to their pension, with 6 out of 10 of these landlords actively planning to live off the rental income.
- A further 4 in 10 intend to make a decision on selling or retaining for income depending on the state of the property market at the time they reach retirement.
- Very few portfolio landlords plan to sell all the properties in their portfolio when they reach retirement. Of the 38% of landlords who have previously looked at alternative retirement planning, such as investing in funds, a third said they selected the BTL market because they believe investing in property will produce a better return on their money. Other reasons include providing an income, acting as a long term investment and offsetting against a poor pension performance.
- Rental yields have increased to 6.7% this quarter, returning to a similar level seen in Q3 2011. In comparison, the average rental yield was 6.2% in Q2 2012, 6.2% in Q1 2012 and 5.9% in Q4 2011.
- The proportion of landlords adding property to their portfolio in the last quarter has increased by 3 percent to 15 percent. However, landlords are becoming much more selective on what properties to add to their portfolio with the average number of properties being added decreasing significantly, back to the level seen in Q1 2012, from an average of 2.6 to 1.8.
Well, as you can see, the survey does contain a lot of stats and figures, but the main trends highlighted are the growing use of property as part of mainstream retirement planning – and an increase in rental yields.
Latest House Price Surveys
This is consistent with many of the latest house price surveys and reports. I’ve just been looking at one out this week from Rightmove.
This shows what many of us already know – that prices in our area are quite stable, with the lowest November falls in the last 5 years at just 0.2% (outside London).
Of course this is making it harder to find bmv bargains. However the report also highlights that the property which is selling is the one where the pricing is competitive. Where buyers won’t reduce their prices to a competitive level, they won’t be able to sell – and this is a key message still coming across. All very useful for those of us looking to invest.
There really are some great opportunities around – and with much less risk to capital values than for those who came in at the top of the market 5 years ago. But you still have to be very careful to buy the right property at the right price.
Discover more about today’s opportunities at our next PIM on 29 November 2012 – 6-9 pm Holiday Inn Bristol
If you want to find out more about property investment, or are looking to expand your contacts or knowledge, then do make sure you come along to our next Property Investment Meeting – PIM – on 27 November 2012 at Holiday Inn Bristol City Centre – we have great speakers, including Dick Dabner, a specialist in Joint Ventures and Taiwo Orishayomi on Rent to Rent strategies – as well as a great networking environment and plenty of time to chat to property professionals and get all the latest inside info!
We have a great 2 for 1 offer too – so you can bring a friend or partner free.
To Your Property Success
Del Brown, Property Options