5^th Jan 2015

With the introduction of the new rules for pensions, the buy to let market could experience an influx of new "golden years" landlords investing in the buy-to-let market.

An analysis undertaken by a small businesses' insurance company and carried out by Consumer Intelligence, claims that out of 829 people polled, a third of these are considering cashing in their pensions to purchase buy-to-let properties.

The sample was taken from those who had a pension between the ages of 45 and 64, 32% could use all or part of their pension pot in buying a property to rent, rather than receiving the usual income from the annuity.

The research shows the number of people enjoying their "golden years" (retirement) will enter into the PRS (private rented sector) from April of this year, following pensions "freedom day".

The main reasons given for entering into the PRS market were, capital appreciation and investment security.

Potential investors are claiming that the anticipated yield from their buy-to-let investment could be 13%.

Head of the Insurance company, Jazz Gakhal, said: "Buy-to-let can be a flexible investment, providing an immediate source of income as well as being a long term asset. As such, it is understandable that people approaching retirement age are considering investing their pension pots in property."

She did point out that new landlords must also be aware that buy-to- let does have associated risks.

She said: "Legal expenses for repossessions and potential damage to property are but just a few of the costs that can take significant chunks out of landlords' annual yield. Taking the necessary precautions such as carrying out full reference checks on prospective tenants, inspecting your rental property regularly, and taking out landlord insurance can help to minimise some of the risks faced by landlords."