Landlords refocusing investments on pensions

Some landlords are changing their priorities and investing in pensions rather than property, i reports.

Annuity rates are rising, meaning the amount of income you will be paid for life written into your pension.

Meanwhile higher mortgage rates and a harsher tax environment mean being a landlord is no longer the no brainer it was.

Richard Hill, a 44-year old marketing executive living in Norfolk with his family, has diversified by investing in a pension as well as buy-to-let.

He told i: “I see property as giving me some security but the tax allowances for saving into a pension are good. And with the company matching my contributions, it would be silly to turn it down.”

With a pension for every £80 you save the government automatically adds £20 if you’re a basic rate taxpayer, and another £20 if you’re in a higher rate tax bracket.

The savings are also invested in funds and shares, which can increase their value over the years, though there’s also the risk of the pension amount going down.

Former pro footballer Paul Fewings, who was a landlord for over 20 years, invested in property during his playing days.

But now he said: “A lot of landlords have headed for the exit because their investment isn’t financially viable anymore.

“Especially landlords who don’t own huge portfolios, who have inherited or perhaps saved up for years to invest in just one property in the hope that it would help them in retirement.

“Now, it’s become a millstone around their necks and good landlords are selling up.”

Despite his comments he’s not personally planning to sell up.