Gun Powder, Treason and Plot
Fortunately, most of us know better than Guy Fawkes and would not attempt to blow up a large Grade II listed building in Westminster to achieve our ends; however, it appears as though most of London’s tenants have their own battles to face.
LandLords will be pleased to hear this week that tenants are continuing to fight for each rented property in London as available property seems scarce.
Meanwhile, the over 55s facing retirement may as well have been donning their bell bottoms, short shorts and loud shirts to head to the Disco for a boogie to celebrate the news from George Osborne that they will be given the freedom to invest their pension pot as they wish.
With annuity rates at exceptionally low levels, this offers retirees an alternative for their accumulated savings from years of work. Combining these two well-covered areas in the media this week, it is no surprise that the assumption of many is to purchase a Buy-To-Let property with their pension pot, owing to the regular income and chance of higher returns. Unfortunately, mortgage restrictions will make it difficult for pensioners to hold more than one buy-to-let property. This means that Don Quixote’s advice “It is the part of a wise man to keep himself today for tomorrow, and not venture all his eggs in one basket,” cannot be adhered to.
With celebrations of Guy Fawkes’ failed risky pursuit around the corner, (as numerous research papers show) failure to diversify one’s assets is an exceptionally risky pursuit too. Whilst at CrowdLords we champion investment in property, both from the perspective of a LandLord and an Investor; we strongly encourage diversification across different segments of the financial markets, and the property market itself.
Using property for income in retirement is by no means a new concept; equity release schemes have been in place for years, and are often used by pensioners to supplement their pensions; however these too have their pitfalls, such as exceptionally high interest rates for beneficiaries of your estate.
Unfortunately, every financial product has an element of risk, including the banks’ savings accounts where interest rates may not keep in line with inflation (and if the bank fails, you are only insured for £85,000 under the FSCS). This is why it is vital for 2015s pensioners to carefully consider their new strategy.
In response to The Guardian’s article, at CrowdLords, we hope that new LandLords invest in more than one property if they have a larger amount of money to play with. At the end of the day, your career should end with a firework display style bang, fuel for that crackling bonfire, and maybe even a property boom (with some capital growth for good measure).
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