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The Government has introduced pension reforms which have given the over-55s, ‘the baby boomers’, a great opportunity to invest in property and enjoy excellent returns from their pension savings.

What the pension reforms mean to the property market - buy-to-let baby boomers become big news - by Andrew Loveday

From the beginning of the 2015 tax year, those aged 55 and over will be able to take their whole pension pot, 25% of which will be tax free, whilst the remainder will be subject to their marginal rate of income tax in that year. This new legislation will allow people to access their pension pot in one go, enabling them to purchase a buy-to-let property.

Investors can benefit from rental incomes which greatly outweigh returns from other savings schemes and from traditional retirement annuities. This enables people to release substantial funds for a deposit on a property, which they can then let out in exchange for an attractive rental income, as well as having the benefit of an appreciating asset.

House prices are still continuing to rise, with the average cost of a home in England and Wales standing at £175,653 in July 2014, up 7.2% on the year before. At the same time, the market for rental property is booming, with the number of long-term tenants increasing, it’s an opportunity that no over-55s should pass up.

According to recent research around 31% more households are in private rented accommodation than they were in 2007 and there are 1.42 million buy-to-let mortgages in operation – up from just 89,000 a decade ago. With statistics like these, at Countryside we predict that growing numbers of people will favour bricks and mortar over annuities. An estimated 200,000 people are already expected to cash in their pensions this year, with 16% of these expected to use the funds to buy property.

So if you are thinking of investing in property, there are some attractive yields available and we can help to make it a smooth process. For more information visit the Investor page on our website.

Andrew Loveday, Sales Director

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About this blog

Here you’ll find property related blog articles from the team at Countryside as well as independent experts. Expect regular tips and advice on topics such as buying a new home, interior and landscape design, setting up home, mortgages and finance, plus articles on architecture, the property market, regeneration and more.

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