Landlords hoping for a “steady income in retirement” are now facing the fact that their investment plans may need to change due to new laws and regulations affecting the private rented sector (PRS).
Research from MakeUrMove shows that nearly one million private landlords are facing the issue that the income from their properties won’t be enough to retire on.
The research found that 43% of private landlords in the UK have invested in the property industry with the aim of providing a source of income to fund their retirement.
With the buy-to-let business seeing a bit of a rough patch for both tenants and landlords, three quarters of those landlords have said that if they begin to make too small a profit from their investments or, worse still, they begin to see a loss, they will consider selling.
However, even if they do come to such a decision, they may find it a struggle to sell, as the property market is currently struggling. Results from a survey released by the Royal Institution of Chartered Surveyors (RICS) show an increase in house sales falling through, with surveyors feeling more cautious about the possible outlook of the next 12 months. Such struggles could result in landlords having to sell for less than they may want to, resulting in fewer savings for their retirement.
MakeUrMove’s research shows that those over the age of 55 are most concerned about the possibility of not making enough of a profit on their properties to support their retirement income.
Alexandra Morris, managing director of MakeUrMove, said: “Smaller, casual landlords have been impacted by rising costs of managing their properties, with 38% citing the high cost of repairs as one of their biggest concerns.
“The problem impacts landlords with a buy-to-let mortgage the most severely, as these additional overheads, combined with recent changes to the private rental sector, mean smaller landlords hoping for a steady income in retirement are now worrying that their properties won’t even cover their own costs.”