Potential B2L customers don’t know how to apply
With the pensions freedoms coming into play from last month more than half (54%) of over-40s retirement savers said they would consider investing in buy-to-let, but clearly many have little idea how to put the wheels in motion.
Alex Hammond, head of marketing and communications at Kensington, said: “There is a lot of untapped opportunity for brokers as many consumers don’t know the value of broker advice and haven’t applied for a mortgage since the days of going down to their bank or building society.
“You could look that negatively, or perhaps the untapped value of brokers.”
Of the consumers that do know how to apply 44% would use a broker to choose the right product while three in 10 (28%) would enquire at their existing lender.
But a certain amount of caution remains when considering whether to withdraw money from pensions, as a quarter (25%) were ‘concerned’ about the income tax implications and one in five (21%) feared that they do not understand the rules behind buy-to-let.
The 25% deposit needed for a first-time landlord taking the plunge following pensions freedoms is nearly £43,000, although this ranges from £8,128 in Blaneau Gwent in Wales to more than £104,000 in Greater London.
Steve Griffiths, head of sales and distribution at Kensington, said: “Claims of a wall of money are unlikely to come true and in any case raising a 25% deposit for a buy-to-let mortgage from pension funds will be tough.”