Are you a 'pension pot' landlord or an 'accidental' landlord? Nearly half of buy to let owners use property to fund retirement

Published by Edmund Greaves on 12 October 2018.
Last updated on 12 October 2018

Landlords with limited companies may earn £1,000 less a year

Nearly half of buy to let (BTL) homeowners are ‘pension pot landlords’ according to estate agent Your Move.

A pension pot landlord, says the firm, is a buy to let homeowner over the age of 45 principally using their property portfolio as a store of wealth for their retirement.

Four in 10 (41%) BTL property owners in the UK class themselves within this group. Nearly a quarter (23%) have been a landlord for 15 years or more.

The latest house price data from Halifax shows that house prices suffered their biggest falls since April, £4,000 on average. Any negative movement in prices is likely to affect the capital gains of someone relying on housing for retirement wealth. 

But landlords looking to divest their portfolio in retirement might welcome the recommendation made earlier in the week by Conservative think tank Onward, which proposed 100% capital gains tax relief if selling the property to an incumbent tenant. 

Accidental landlords

The second most common type of landlord was found to be an accidental landlord (29%), i.e. those who did not initially expect to become a landlord.

Accidental landlords are most likely to be under 45 and female according to Your Move. Often these kinds of landlords find themselves renting properties through inheritance from deceased parents’ homes or other changes to personal circumstances.

These accidental landlords might find very different experiences around the country if they intend to sell. Recent research found that Edinburgh and Glasgow have the fastest moving markets, while London has the stickiest. 

Professional landlords make up just one in five (20%) and consider BTL property renting to be their full-time career. Your Move says they tend to be male and over 45.

Just three in 10 pension pot landlords consider themselves to be professionals earning a living from a property portfolio.

Martyn Alderton, national lettings director at Your Move, comments: “Our research suggests that  the private rental sector is still seen to offer significant opportunities, providing many landlords with a source of income and funding into retirement.

“It’s also clear that ‘pension pot’ landlords are keen to build a personal rapport with tenants who will look after their investment.

“As an industry, it’s increasingly important that we continue to support these ties, providing long-term benefits to tenants looking for a property to call their home and also for landlords looking for ways to fund their retirement.”

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No such thing as an

No such thing as an "Accidental Landlord", you either choose, for whatever reason, to become a landlord or not.
"Temporary or even possibly Reluctant Landlord" maybe but is never accidental.
You never hear of people buying houses as being accidental, so please stop propogating this ridiculous phrase.

Not too concerned about

Not too concerned about pension pot landlords, it's those who borrow money to purchase a property and then charge rent to pay off the loan and interest and to receive a profit. Obviously this pushes up property prices and increases the value of their 'investment'. I haven't the stamina to comment on foreign money. As you can guess, these views usually attract the "oh you're a Socialist" comment, but I simply reply "no, I'm a parent".