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Main office

COLBURN
5 & 6 BAILEY COURT
COLBURN BUSINESS PARK
RICHMOND
NORTH YORKSHIRE
DL9 4QL

01748 897 630

Estate Agency Offices are located in

BARNARD CASTLE, BOROUGHBRIDGE & RICHMOND

Residential Management Team

01748 829210

GSC Grays - Property Estates Land

A ‘New Force’ In the Buy to Let Market!

A new generation of pensioner landlords is expected to flood the buy-to-let market, which has the potential to push up house prices for first-time buyers, as more and more people turn to that old favourite ‘Bricks and Mortar’ to fund and diversify their financial retirement planning.

The number of people planning to take money out of their house to supplement their pension has increased dramatically, according to a study from YouGov and investment adviser, Old Mutual Wealth. The study showed that 11% of those approaching retirement, plan to buy a second home to rent out, compared to the 6% of pensioners who currently rely on this form of income. Annuity reforms which come into effect in April, allowing baby-boomers to withdraw from their pensions a cash lump sum, are expected to fuel a wave of buy-to-let purchases.

This surge of interest combined with the UK’s continuing housing shortage, particularly in Greater London, the South East and other popular areas with investment purchasers; may have the effect of driving up prices for those not yet on the ownership ladder. With the Bank of England base rate continuing to be held at 0.5% and a number of lenders offering extremely attractive mortgage rates, this also provides further drive for the investment opportunity in property.

Analysis from the property group, Savills, has identified approximately £3 trillion of net housing wealth tied up in owner-occupiers’ homes, much of which is held by older households who have paid down the bulk of their mortgage debt and seen significant house price growth. “Pre-retirees face much more pressure to use some of that latent wealth, given pressures on pensions and an increasing need to help their children get on or move up the housing ladder. That means they are much more likely to consider downsizing, either reinvesting the sums released into rental property or passing it down a generation,” said Lucian Cook, head of residential research at Savills. The YouGov data also found that 15% of those preparing to retire are planning to downsize from their main home, compared to 2% of the current pool of pensioners. If a proportion of these move into retirement villages, it would then potentially free up more family homes and curb price growth for those moving into their second or third house. “This downsizing is likely to free up some family housing while also increasing demand for smaller properties, offsetting some of the constraints on transaction levels that result from mortgage regulation and potentially narrowing some of the gap in pricing on different rungs of the ladder,” said Mr Cook.

The possibility of a Labour win in May’s general election could also upset retirement plans; The introduction of rent controls, a policy advocated by the Labour leader, Ed Miliband, could deter reputable landlords and drive up rents for tenants, experts have warned.

Should you be considering a buy-to-let investment in our area, GSC Grays have a wealth of local professional property knowledge and can help you along all the various stages of the purchase process; whether that is a fully inclusive service where we can source, survey, acquire and then let / manage the property for you, or perhaps, if you have seen a property you are interested in acquiring, we can assist by offering to undertake a Homebuyers Survey / RICS Compliant Valuation for any prospective purchasers wanting peace of mind and reassurance before buying.

We currently manage a large portfolio of rented properties across our offices and our residential management teams can provide either a fully managed option which takes away many of the day-to-day headaches that some Landlords have to deal with, or alternatively, we can offer a tenant-find only service as required.

As with any investment, suitable advice should be sought and at GSC Grays, we work with a large number of professional contacts to ensure that you get a holistic approach to any new opportunity, allowing you as the client to make a reasonable and rational final choice.

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