Figures from an independent Landlords’ Survey by BDRC Continental found that four out of five plan to sell off properties or live off rental income to fund their later years.
At a time when annuity rates are falling and pension drawdown changes are slashing retirement income, landlords are putting their faith in property over pensions and intend to live off rental income in their later years.
Another 20 per cent said they would sell off some of the properties they own, with five per cent saying they would sell all of the properties in their portfolio.
The HomeLet Rental Index released this week revealed that the average rent across Britain has increased in the last three years, from £679 per month in October 2009 to £790 per month now.But those with property in London in particular are making much more, with the average rent coming in at a massive £1,240 per month, rising six per cent in the last year alone.
But with house prices still high - even after having fallen 20 per cent since their 2007 peak - large deposit demands represent a significant barrier to investment.After the property slump hit, buy-to-let's source of potential income is attracting investors eying long-term rental returns rather than the capital growth from rising house prices chased in the boom years.
However, while people people may think they can bank on their property and not their pensions when they give up the day-job, they should remember the buying, maintenance and running costs that come with owning and letting a property.As most buy-to-let mortgages are set up interest-only, they should also remember that their debt will not be cleared and that base rate will eventually rise from its record 0.5 per cent low.
Mark Long, director at BDRC Continental, said: ‘Landlords consistently tell us that they see their property portfolio as forming a critical part of their pension provision for the future.‘On average, landlords intend to remain active in the rental sector for another 15 years or so, and see a combination of capital gains and rental income as underpinning their pension strategy.’
The research comes after the Council of Mortgages Lenders said that one in eight mortgages are now buy-to-let loans – the highest level since records began.The loans now account for 1.44 million of the 11.3 million mortgages in the country, compared to there being just 275,500 a decade ago.
Click here to read the original article Forget saving for a pension, buy-to-let landlords reckon rental income will see them through retirement