In a clear shift from 2011, property investors are more likely to bolster their incomes with buy to let rents rather than to put the money aside for retirement, says BM Solutions, one of the UK’s leading landlord mortgage lenders.
Only six months ago, 84% of landlords were saying that they invested in buy to let as a retirement saving strategy, but this has dropped to 78% in research conducted in the first quarter of 2013.
Seven out of 10 landlords told the survey they intend to finance their retirement from buy to let rents.
Nearly two thirds of landlords explained property investment was their main retirement planning strategy.
Not all are relying on property – 40% said they would make a decision about their property investments depending on the market when they retire, while just 4% plan to sell up when they give up work.
Landlords argued they favoured property because they felt buy to let generated better returns than other investments. Others said they looked to their property investments to provide an income and as an alternative to poor returns from pensions.
Phil Rickards, head of sales at BM Solutions, said: “The squeeze on spending does mean that we're seeing more landlords using their rental income to supplement the cost of living.
“However it's important that those entering the market continue to see it at as long term investment as well as considering short term requirements.”
The survey also looked at rental yields for buy to let properties.
The average rental yield in the last quarter was 6.1%, down from 6.2% in the last quarter of 2012.
By region, yields were highest in the North East, at 7.1%, and lowest in Yorkshire and Humberside, with 5.6%.
