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Leading local estate agents Aston Mead are predicting a boom in buy-to-let investment in 2015, following changes to pension rules that come into play this spring.

The freedoms announced in last year’s budget mean that after April 6, savers over the age of 55 will be able to take their pension as cash, rather than locking into an annuity. This money could then be used to buy a rental property, with some returns expected to be as high as 13%.

Director Adam Hesse says: “We shouldn’t underestimate just what a huge impact these radical pension reforms are likely to have. An army of ‘silver investors’ will now be able to make use of their pension pots to invest in the property market. And with annuity rates running as low as 2% in some cases, a buy-to-let yield is a very attractive alternative.”

Recent research by Direct Line for Business has predicted that 32% of people aged 45 to 64 with a pension are considering using it for a buy-to-let property.

Adam Hesse explains: “These people may be attracted by the regular income such a property can provide, to diversify their investments, or because of the perceived security it represents. Others might be interested in the expected capital appreciation, or because they would like to invest in something that will allow them to leave an inheritance to their children. Whatever the reason, we’re likely to see a significant surge in interest from people who have lost faith in annuities and want to seize an opportunity which has never available to them before.”

However, Adam Hesse is also keen to ensure potential landlords understand what they are letting themselves into – especially if they have never rented out a property before. He added: “Buying-to-let is not risk or hassle-free. So it’s absolutely crucial that anyone considering going down this path seeks expert advice in order to understand the tax implications, what returns such properties can deliver, and what they will do if the property stands empty.

“We’re in a position to help with all of these questions, and it’s only right to ensure that we take a responsible approach in providing the answers. But it’s fair to say that in the long term, property investment is still leagues ahead of any other form of investment return.

“Buy-to-lets have outperformed annuities for years. This has been the fastest growing sector for a while - and we see no reason why it shouldn’t continue to be so for the foreseeable future.”


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