Property investment is proving to be a popular new retirement income option, according to recent research.
- Up to three-quarters of pensioners may have considered making a property investment
- Pensioners believe buy-to-let is a far more stable long-term investment than the stock market
- If you are looking to make a buy-to-let purchase, Manchester has been identified as a location that offers strong investment potential
The income-generating potential of a buy-to-let property has made the investment a major consideration for many UK pensioners.
Following the April 2015 pension changes, those approaching retirement now have more options than ever before and a report from IP Global shows that 70% have opted to drawdown all or part of their pension pot. Domestic and international property investments are the top choices for those with the available cash.
The Global Real Estate Outlook findings revealed pensioners believe property is far more predictable and stable than the stock market over the long term.
According to the research, London and Manchester are set to offer pensioners the most capital growth in the coming years.
The London market has recovered since the outcome of the general election and has generated 12% growth this year.
Average property prices are much lower in Manchester and perhaps make a more suitable retirement asset.
Investors who purchase buy-to-let property in Manchester now are set to benefit from price growth of 26.4% up to 2019.
However, the main thing that retirees should consider is a property’s potential to generate a regular income via monthly yields. The UK’s private rented sector has doubled in size over the past decade and the demand for rented accommodation is high.
Rents, and therefore yields, are growing at a much faster pace in regional cities such as Manchester. The rate of rental growth – as well as the total yield – is important as once retired, people are much more exposed to the pressures of inflation as they have no salary to rely on.