BoE’s chief economist says property investment better than pension
By |Published On: 31st August 2016|

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BoE’s chief economist says property investment better than pension

By |Published On: 31st August 2016|

This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.

The Bank of England’s chief economist has moved to suggest that investing in property is a better option for retirement than paying into a pension.

Speaking about preparation for retirement in the Sunday Times, Andy Haldane noted that, ‘it ought to be pension but it’s almost certainly property.’[1]

Shortage

Mr Haldane owns two properties but pointed to the fact that there is a severe housing shortage across the country. In turn this is driving up prices and placing upward pressure on properties.

Haldane said, ‘as long as we continue not to build anything like as many houses in this country as we need to…we will see what we’ve had for the better part of a generation, which is house prices relentlessly heading north.’[1]

Residential property investment returns-rental income and capital growth-are continually outperforming other mainstream investment types. These include commercial property, UK Government bonds and a more secure alternative to the volatile stock market.

Agreement

A number of property experts have moved to agree with Mr Haldane’s comments, including Graham Davidson, managing director of Sequre Property Investment.

BoE's chief economist says property investment better than pension

BoE’s chief economist says property investment better than pension

Davidson observed, ‘poor returns, hefty fees and inconsistent annuity rates have caused the number of Britons taking out pensions to fall considerably. As Mr Haldane has pointed out, bricks and mortar continues to out-perform many other more volatile investments, providing stable returns with the added benefit of owning a tangible asset, unlike stocks and shares. This is particularly important for the older generation, many of whom will look to hand down their investment to family members.’[1]

‘Our figures support Mr Haldane’s claim, with 46% of our investors citing investing for their pension pot as their primary motivation for choosing buy-to-let property and 95% of investors purchasing with their pension in mind.’[1]

Opposition

However, not all experts are in agreement. Ros Altmann, former pensions minister, labelled Haldane’s comments as, ‘divorced from reality.’ He also said it was, ‘irresponsible’ to think people should rely on property over pensions.

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2016/8/investing-in-property-is-better-bet-than-a-pension-says-boes-chief-economist

About the Author: Em Morley (she/they)

Em is the Content Marketing Manager for Just Landlords, with over five years of experience writing for insurance and property websites. Together with the knowledge and expertise of the Just Landlords underwriting team, Em aims to provide those in the property industry with helpful resources. When she’s not at her computer researching and writing property and insurance guides, you’ll find her exploring the British countryside, searching for geocaches.

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