Property still perceived as best way to save for retirement

Recent tax changes have not put people off the buy to let market

A new survey reveals that 49 per cent of the population believe property is the number one way to make most of your money when saving for retirement. This figure is part of the Office for National Statistics (ONS) survey on the nation’s attitudes to retirement saving. 

The popularity of property as a means to save for retirement has been rising continuously since 2012, when 40 per cent of people opted for it.

Nathan Long, senior pension analyst at Hargreaves Lansdown, says: ‘The government’s attempts to make buy to let investing less attractive have done nothing to dim the attraction of property as the best way to make most of your money.’

Buy to let (BTL) mortgages made up just 1.7 per cent of all outstanding mortgages in 2000, according to Savills. This share has grown every year since then and BTL mortgages now account for 17.3 per cent of all outstanding mortgages. But Savills points out that there has been no growth in its share since September 2016. 

In contrast to the ONS findings, the company argues that landlords are feeling the impact of government policies to make BTL investment less attractive. Tax relief has been curbed, lending criteria are stricter and there is a 3 per stamp duty surcharge on additional homes and buy to let properties.

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Last week the National Landlords Association announced that 20 per cent of its members planned to sell some of their portfolio this year. Savills argues that it therefore expects to see more BTL investors selling up and leaving the market.

But given the fact that employer pensions – which were the second most popular option – only appeal to 22 per cent of people as the way to make the most of your money for retirement, according to the ONS survey, it seems property is likely to remain as the most popular option to save for retirement for some time.

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