Quote Ref: WS1

Pension pot landlords

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Back in May of 2018 we asked whether property or pension savings are likely to be the more reliable source of income for your retirement.

Our conclusion then was that there appeared to be a good case to be made both for property investment and for pensions savings.

That conclusion appears to be borne out by recent research published by Property Wire on the 15th of October 2018, which suggests that large numbers of landlords in the UK have invested in buy to let property as their pension pot.

What is a pension pot landlord?

The definition adopted by the survey – of more than 1,070 landlords – painted the pension pot landlord as someone over the age of 45, using their buy to let property portfolio as a long term investment to finance their retirement. 

More than four out of ten such landlords responding to the survey said that they were investing in the buy to let sector for pension purposes. 

The analysis cited by Property Wire found that almost 50% of all buy to let landlords in the UK regard their investment in let property as a pension pot. Such “pension pot landlords” are also in it for the relatively long run, with 23% of them having been investors in the buy to let sector for 15 or more years. 

Characteristics of a pension pot landlord 

Pension pot landlords are inclined to live closer to their let property or properties than other types of landlord – 41% of them living within one to five miles of the buy to let property. 

Although investment in buy to let property is the way to achieving pension goals, 29% of such landlords continue to see their let property as a business – and 53% of them are likely to have invested in more than one property.

Driven by business goals and a desire to create their own pension pot, these landlords also seem to be more interested than some other landlords in fostering a personal rapport with their tenants and actively seeking those tenants more likely to respect and protect the let accommodation.

For that reason, 18% of pension pot landlords say they prefer to meet or to talk to new tenants before signing a lease and 53% of them said it was important that their tenants considered the let property as their own home. 

That personal rapport with tenants is especially important, say the authors of the report, not only in providing long-term benefits to tenants renting somewhere they can call their own home, but also for those many landlords in search of a steady and reliable source of income to fund their retirement.

Professional and accidental landlords 

In addition to approximately 50% of landlords looking to their let property as a pension pot, the survey also revealed that 20% may be described as professional landlords (in the business as a career or their job) and 29% accidental landlords (entering the market by way of an inheritance or some other change in personal circumstances).