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Over-55s will buy second homes say Prudential

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Mon 07 Sep 2015

Over-55s will buy second homes say Prudential

 

The housing market could see an increase in the number of “silver landlords” as two in five (37%) over-55 homeowners plan to buy a second property as a buy-to-let, development or for their relatives, research from Prudential has revealed.

The insurer calculated that the current crop of over-55 homeowners will eventually carry out three million property transactions worth more than £775bn.

One in seven (14%) who said they would invest would do so because of the pensions freedoms.

It also seems older borrowers have cash to burn, as the average maximum purchase price for their next property is over £250,000 and one in five (20%) said they are willing to spend over £350,000.

Stan Russell, retirement expert at Prudential, said: "There was a lot of speculation that the pension freedoms would spark a rush of over-55s investing in Buy-to-let property as a means of generating income in retirement. However our research suggests that this hasn't yet been the case.

"In fact the process of withdrawing cash from a pension fund to purchase property and potentially generate an income is complex and could result in a large tax bill.

 

"Anyone aged 50 or over with a defined contribution pension is entitled to free and impartial guidance from the government's Pension Wise service, and many of those considering accessing their retirement savings under the new freedoms would benefit from a consultation with a financial adviser."