A Buy to Let  lender is calling on the Government to allow savers to include residential properties within personal pensions. The recent Budget saw George Osborne introduce changes into pensions where savers were given new options on how they could receive their pensions and getting rid of the necessity of having to purchase an annuity.

 

The feeling around the industry is that more and more people will turn to buying properties with their pension pots expecting greater returns from their accrued savings.

The specialist buy-to-let lender wants the government to expand the savers' options by allowing them to include buy-to-let properties in SIPPs (self invested personal pensions).  

The lender's managing director of the lender John Heron stated that the private rented sector is rapidly increasing to help meet the growing demand for renting. More people are now investing their money into housing aided by the greater choice of buy-to-let mortgages appearing in the market.

Heron said:“It is clear from independent research that landlords favour an investment in residential property because it is a physical asset, has a strong performance record through the cycle and acts as a hedge against inflation.

“It is also clear from research that landlords regard their investment in property as part of their wider planning for their financial security in later life.

"The vast majority of landlords hold just one or two properties to augment other savings and investments, but buy-to-let property is unusual in that investors cannot currently hold it in their pension.

"The last Labour Government did look at this but failed in the final analysis to deliver.”

The lender commissioned independent research and found that 75% of landlords view their properties as their pensions and 65% of these are hoping to live off their rental income when they retire. 

 

Heron also added: “Private rented property is a popular choice for investors and could sit well in a personal pension because it generates a flow of income, has strong defensive qualities and an excellent track record for producing good returns.

"Having given more choice to how we take our pension benefits, the Government should consider how we can be given more flexibility in building our pension savings and allow individuals to include in their pension the one asset that many investors regard above all others, an investment in housing."