There has been a fall in the proportion of people willing to become new buy-to-let landlords in order to boost their retirement income, Retirement Advantage found.
Retirement Advantage’s ‘Home Is Where The Wealth Is’ report found that only one in three (35%) were likely to consider it, with 62% saying they were unlikely to.
This is a huge change from the almost even 49-51% split recorded this time last year. The shift is even more pronounced for over 55s, with 10% saying they would enter buy-to-let compared to 87% saying they wouldn’t – compared with 27% and 73% respectively last year.
Alice Watson, head of product and marketing at Retirement Advantage, said: “The reduced appetite for entering buy-to-let is no doubt a reaction to new stamp duty surcharges on investment properties, and the gradual removal of mortgage tax relief.
“However, predictions of buy-to-let’s demise would be premature. There are still nearly a million landlords over 55 and for those landlords, there are innovative new mortgage options available to increase ways to boost income from investment properties.
“At the same time, we know that downsizing is becoming less popular, not least because the fees associated with selling up and moving can be much higher than expected.”
While the fall in appetite over the last year is striking, there remains a substantial number of existing landlords – with as many as 900,000 estimated to be over 55.
Furthermore, just 20% of people said they are likely to sell their property and move to a smaller one when they retire, down from 26% last year. Among over-55s it has fallen from 22% to only 16%.
Watson added: “Property can still play a significant role in providing retirement income, though. Indeed, there is a pressing need for it to do so, as pensions and other savings are increasingly unlikely to meet many people’s retirement expectations on their own.
“There is a real opportunity for advisers to help clients understand other ways property wealth can be accessed – routes which mean clients can stay in their home and still pass them on to next of kin.”