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Pension changes will create more landlords

Nia Williams

April 24, 2015

A quarter of all those polled agreed that they planned to use a lump sum when they retire to buy a property for rental, a trend which will see the rise of the ‘real estate retiree’ generation.

So strong is the allure of the B2L market, of those who said they were to take out a lump sum from their pension savings on their retirement, most believed buying a property to let out was their top priority – well above plans such as helping buy a property for other family members (16%), paying off an existing mortgage (15%) or buying a new home for themselves (14%).

Just 10% of those surveyed said they would use any cash drawn from their pension savings for other reasons.

Bank of Ireland UK’s latest buy-to-let market index shows that confidence in the B2L market is at its highest level since the tracking project began a year ago, and is sharply up on its level last quarter.

The positivity which is revealed appears not to be contained to those planning their retirement – 48% of homeowners surveyed said they were interested in becoming a landlord within the next two years, with around one in six (16%) saying they were very interested in the prospect.

However further education around the implications is needed, with only two fifths (42%) of existing B2L landlords believing they fully understand the impact of capital gains tax, and only 36% having a full understanding of inheritance tax implications.

Mark Howell, director of marketing & customer management, Bank of Ireland said: “With the latest findings allowing us year-on-year comparison it is clear that there is building optimism around the buy-to-let market.

“The fact that many are hoping to become landlords must be considered in light of the continued confusion surrounding the tax implications of the market, especially in regards to inheritance tax and those who find themselves becoming landlords through bereavement.

“Better education around these issues is a must, especially with so many set to join the ranks of landlords across the UK.”


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