One financial publication recently said it was "the house that saved the world", but now the idea th...
One financial publication recently said it was "the house that saved the world", but now the idea that buying additional property to safeguard pension income is gaining strength and could be the new black according to Mortgage Talk partner Steve Mansfield.
He says the projected returns from investing in shares or gilts mean that pensions planning demands that people start looking at something else.
And that other something is investing in property.
This conclusion is based on the idea that as current homeowners reach the stage whereby significant equity is sunk into their homes and mortgage payments decrease, they will start looking to buy additional properties rather than use the availible equity to make the move to another, larger property for themselves.
"The rental income available from the property will generally exceed the cost of any mortgage," Mansfield says.
Changes to the way mortgage payments are accounted for by lenders is also encouraging the trend towards buy-to-let investments, making it easier to borrow money to acquire additional property beyond the earnings multiples generally used for first-time property buyers.
Mansfield believes the buy-to-let market will continue to remain strong in the Southeast, as many people remain unable to scrape together a deposit, and will committ to short term rental agreements as long as the place being rented is of decent quality.
"Remember that lenders nowadays will lend up to £1m, provided that your rental income will cover the repayments on this."
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