Majority of landlords won't use pension freedom for property investment

The latest research by the UK’s largest landlord association revealed that, of those with a pension in place, just five per cent are planning on withdrawing a lump sum to invest or expand their portfolio.

Fourteen per cent of landlords said they would consider using a lump sum to invest in further properties, while 11 per cent said they didn’t have enough of a pension to withdraw a lump sum at all. Seven per cent of landlords said they already had other plans for withdrawing a lump sum and 19 per cent were undecided.

The research from the NLA, which asked landlords about their plans at retirement, also found that:

• Three per cent plan to sell up completely
• One in ten (19%) have no retirement provisions in place
• A quarter (25%) plan to sell at least some properties
• Six in ten (61%) plan to live off portfolio income at retirement
• A third (34%) are undecided and will assess the market when they reach retirement age.

Carolyn Uphill, Chairman of the NLA, said: “There has been a lot of talk around pensions being used to invest in buy-to-let (BTL) since the announcement on pension freedoms was made last year. While the changes may be attractive to those considering a move into BTL, it’s clearly not that popular an option for landlords.

Those currently in the market already have an asset to use if they want to expand – their property – and therefore, depending on circumstance, will have the means to put a lump sum towards other investments or plans; that is if they want to withdraw it at all.

The NLA offers invaluable advice, guidance and support for both existing and new landlords to help ensure the smooth and successful running of a letting business. It would be advisable for anyone considering or already planning on using a lump sum from their pension for investment in BTL to look into how the NLA can help.”