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Many landlords face a bleak future, with fears that their buy-to-let investments will not cover costs or provide them with the finances for a decent retirement. Traditionally, investing in ‘bricks and mortar’ has been considered a healthy option. Property prices are always rising, usually much faster than inflation, and property was seen as a safer option than investing in stocks and shares. Many people bought property, either as a place to live or as a buy-to-let, to rely on for income when they retired. It has been seen as a secure way for money to grow and to increase your wealth. But relying on property to provide a pension may not be as safe as houses after all, according to MakeUrMove managing director, Alexandra Morris.

Up to one million landlords could be facing a pension black hole, estimates show. The new rules, regulations and taxes imposed on landlords mean that the income they receive from their properties may not be enough to keep them in retirement. Furthermore, about three-quarters of affected landlords will think about selling up if their profit margins become too small or they start making a loss because of these additional costs.

However, as more buy-to-let investors are selling up because of the recent tax and regulation changes, it is feared that some landlords may not be able to sell at the right price. There could be a deluge of properties coming on to the market in some areas, which could mean lower prices. The problem affects older landlords in the main, because they have less time to make any changes to their economic situation before they come to rely on their investments for an income when they retire. The over-55s are most concerned that the profit on their properties will be too small. Smaller landlords hoping for a steady retirement income now fear the properties won’t even cover costs. Ms Morris said that the problem is worse for landlords with buy-to-let mortgages, because they have these additional overheads as well as the changes in regulations and taxes to contend with. She said that 38% of smaller landlords say the high cost of property repairs is one of their main concerns. These new regulations mean landlords have fewer funds for maintenance and repairs unless they increase rents. Landlords are being forced out of business at a time when they are needed the most.

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