Pension reforms which take effect from April 2015 could trigger a surge in buy to let investments.
Pension investors aged 55 and over will be able to withdraw their entire pension pot with the first 25% being tax exempt and the remainder taxed at the investor’s marginal rate. This opens the door to a more flexible approach to investing for income and growth.
Property as an alternative investment
Investing in residential property as a means of generating income and capital growth has long been used by those who consider residential bricks and mortar as ‘tangible’ assets.
From April, investors who have access to their pension fund can invest in residential property by releasing the cash to do so.
It is clearly a good option to be able to use cash from a pension fund to earn a rental yield that outweighs the normal saving rate whilst still having the opportunity of capital growth from any increase in the value of property over the long term.
Consider the next generation
Using your pension fund to help children or grandchildren with a deposit for their first home is another good example of how this new flexible approach to pensions can benefit the extended family.
Clearly, there is a lot to consider when making a decision about investment and therefore it makes sense to take advice.
If after considering all of your options, residential property looks like an attractive proposition then we are on hand to provide you with everything you need to know about the property market in Edinburgh and the Lothians.
To find out more, why not ask us for a no obligation consultation to discuss the dynamics of the market and where is best to buy for the purposes of renting?