When I’m 64 – 81% of private landlords say their properties are their pensions.

08/11/2012 By Mark Long

BVA BDRC’s Landlords Panel has revealed that property plays an integral role in private landlords’ retirement plans, with many planning to live off the rental income or offset poor pension performance and the average landlord intending to remain active in the rental sector for another 15 years or so. Others see property as more reliable than traditional forms of investment, such as stocks and shares, which may carry more risk. The study also shed some light on the state of the property market – although tenant demand rose, confidence has taken a seasonal knock.

The value of property as a long term investment to private landlords was clear from the study, with four fifths stating that their properties were their pensions. A third who had bought their property outright said that investing in property gave a better return on their money. Three fifths told BVA BDRC they planned to live off the rental income while a quarter planned to sell some or all of their properties as part of their retirement plan. Two fifths, however, said their plans could change depending on the state of the market.

The rental sector showed a lull in optimism, bringing key confidence indicators in line with those of the same period a year ago. Although optimism was down, it is expected to recover towards the end of the year and things are generally looking good for the sector. A rise in tenant demand of 7% and in yield of between +0.5% and +6.7% demonstrated the private rental sector was still strong. Additionally, voids and arrears remained stable and the number of landlords with a single property making a loss fell by three quarters to 4%.

Property has become an important part of many landlords’ retirement plans and, although some may have concerns regarding the changing nature of the market, the Landlords Panel survey suggests their investments should be secure as the private rental sector continues to develop.