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A&L: Portfolios ‘a passion, not a profession’

David French

January 19, 2008

According to a report by lender Alliance & Leicester, 87 per cent of landlords insisted their properties were more of a profitable pastime than a profession, with 57 per cent using their portfolios to accrue funds for the future instead of just to supplement their income.

In all, only 21 per cent of those asked said they saw property as a short-term investment which they would cash in on in the next few years.

However, the attitudes of male and female landlords showed significant differences, with half of women using their portfolio for a retirement fund, compared to 40 per cent of men.

In addition, 65 per cent of male landlords said they wanted to expand their portfolios, compared to 45 per cent of female landlords.

Stephen Leonard, director of mortgages at Alliance & Leicester, suggested that the results of the report into landlords’ attitudes towards their portfolios proved that the buy-to-let market was in rude health.

He explained: “It is very encouraging to see landlords taking a measured, long-term approach to their buy-to-let investments. Releasing the equity built up in a rental property over a number of years could provide a crucial lump sum to cover future needs, like university fees, helping their children onto the property ladder, or even acting as an alternative pension pot.

“But whether it is to provide a pension for retirement, or a monthly income, landlords’ ambitions suggest buy-to-let will remain an important part of the overall UK housing market.”

Ying Tan, managing director of The Buy-to-Let Business, agreed that property was becoming a valid pension alternative.

He said: “Most of our clients are professional landlords, and so the vast majority do use their property portfolios for income purposes. However, Alliance & Leicester is definitely right on the pensions side as it is now very much seen as a long-term replacement for a pension scheme.

“A lot of people like investing in property as they have more control than if they invested their money elsewhere. If you buy shares, you have very little control over the risk that you face. However, you can influence property more and add value through renovation and modernisation, for example.”

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