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Pensions concerns lift UK property investments

29th November 2005 | back to article listings BACK    print this article PRINT

It has been claimed that the UK's buy-to-let market is set to see major benefits from the continuing pensions crisis, as more people seek to secure their future through property.

A new report by the Royal Institution of Chartered Surveyors (Rics) has suggested that as more people become concerned that they will not have enough money in their pensions to look after them in old age, they are turning to the buy-to-let market as a way to bolster their income. The property market has been growing at such a fast pace in recent years that, despite the current slowdown, many people still consider purchasing a property to be the best way to supplement their income, with rental yields still relatively high.

Investing in the UK property market can help to boost retirement funds as the current pensions shortfall means many people are now looking for an alternative way of funding their retirement.

Commenting on the Rics quarterly lettings survey, spokesman Jeremy Leaf said: "Many buy-to-letters are now choosing to stay in for the long haul, viewing their investment as a more significant part of their pension plan."

The cooling of the property market over the past year has not precipitated a crash in the housing market as many had predicted, meaning that properties have largely remained out of the reach of the majority of potential first time buyers. Therefore, an increasing number of young people are abandoning plans to get a foothold on the property ladder just yet, preferring to rent. That trend is helping to push the demand in the buy-to-let sector, which UK investors can capitalise on as they consider their retirement funds.

Only a small proportion of landlords are now looking to sell their properties rather than re-let them, something which highlights the fact that the industry is currently a very fertile source of revenue for the majority of investors.

As such, the future of property investment in the UK looks set to boom, with the buy-to-let market still very much in demand as property prices begin to show signs of rising once more. Meanwhile, the appetite to invest in properties is also present in abundance, thanks to the current climate of fear over the potential pensions gap which means more people are thinking how best to invest their money to keep them in a comfortable state when they retire.

As the pensions crisis deepens and media attention is drawn to the subject ahead of the Turner Report on Wednesday, the property sector is becoming an increasingly attractive investment for thousands of people in the UK, meaning there could be a boom in the buy-to-let sector overt the months and years to come.

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