Retired professionals make extra income from renting - Emerging Real Estate

Retired professionals make extra income from renting

01/11/2011

 Retired professionals make extra income from renting

In an increasing trend, it appears that retirees are turning to the property market to provide them with an extra income.

The Council of Mortgage Lenders have recently released data showing that not only did buy to let loans increase by over 20% from April to July 2011, but that much of this increase was due to mature homeowners remortgaging their homes to invest further in other properties.

House builders are recognising this trend as well, and some are even offering incentives. Barratt for example is offering a leaseback scheme specifically for retirees who can buy a show home currently under construction and then rent it back to Barratt who will market the property on your behalf until the whole development scheme is finished. Gary Ennis, MD of Barratt, confirms that “Barratt will keep the property in immaculate condition and then it is returned”.

It isn’t just new-build properties that are attracting this type of more mature buyer however. Older properties are often favoured by retirees and ex local authority properties in particular can often sell for below the market rate.

Retirees are finding that, in the absence of many viable alternatives, rent is a good way of boosting their incomes throughout their retirements and therefore the number of older landlords is increasing sharply. With yields of 7% in many areas, interest paid by Banks on a typical savings account simply cannot compete with the money that can be made from renting out a buy to let property. The turmoil currently around interest rates, savings and pensions are making people understandably nervous and until this changes it seems the incentive to invest in buy to let property will continue to attract those with means to do it.