Pensioner landlords could drive up house prices
A huge number of people are coming up to retiring age and many of them are planning to downsize and move into smaller properties, no longer wanting the larger multi bedroom homes that they own and which in most cases are mortgage free. However this can make things even more difficult for young buyers as the stock of smaller homes is bought making the home ownership dream even more out of reach for young buyers.
A recent study has shown that a lot of these pensioners plan to use the released equity in their larger homes as a means to finance buy to let properties, which it is thought will push up house prices even further. According to a YouGov study the number of people planning to take money out of their house to supplement their pension has increased dramatically.
On top of that the reforms regarding annuity which come into effect in April this year will allow pensioners to withdraw their pension in one lump, for many this will mean that they could buy a one or two bedroom flats to rent. But this of course will depend upon how much they have in their pension pot, data shows that for most people this is likely to be very small only in the region of £30,000.
As with anything concerning property and pension funds, due diligence should be observed as a change of government at the next election could cause problems, it is known that a Labour government is considering rent controls which could deter potential buy to let purchases.