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Retiring with a buy-to-let

Helping people plan for retirement Enables’ experienced IFA’s have seen more and more retirees looking to invest their tax free pension cash lump sum into the buy-to-let property.  Despite the looming tax clampdown, this market has stayed fair constant according to data from Fidelity International.

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From the 6th of April 2016, any buy-to-let investor will have to pay an extra 3% stamp duty surcharge more than other residential buyers. Higher-rate tax relief on mortgage interest is due to reduce from April 2017 to the basic 20% rate and landlords overall will have to claim less for wear and tear on their properties. Despite these impending changes retirees’ continue to look to bricks and mortar with 7% of Fidelity’s retirement customers using their tax free cash lump sum to invest in a rental property this January. In the latest budget Osborne also announced further Stamp Duty increases to large property investors, those with 15 properties or more. 

Investment director for personal Investing at Fidelity International, Maike Currie said: “for many retirees, buy-to-let is seen as a ‘no brainer’ investment given the spectacular rise in property markets, particularly in London, over recent years. But tax changes aside, the illiquidity of the housing market as well as costs in the way of maintenance, stamp duty, mortgage arrangement fees and a host of unpredictable outgoings can chip away at income. Not to mention the time and effort required to manage a property and the risk that it may lie empty between tenancies.”… “Buy-to-let in retirement may work for some but with the added extras that come with it, it’s worth asking yourself, whether you really want to be managing a property in your eighties?” Enable’s IFAs in Bishops Stortford can help talk through your retirement options.

Source: Landlord Today

Issued by: Enable Independent Financial Life Planners • 
25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 – Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.

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