The total invested in Buy to Let (BTL) properties in the UK has reached £1,250 billion, says the Telegraph, and is rising fast, so that it could soon surpass the £1,600 billion invested in workers’ pension schemes.
But the Telegraph sounds warning notes about the boom. It points out that 50% of BTL owners are ‘accidental landlords’ who couldn’t sell their property, and that two-thirds of all BTL owners have just one property. Moreover, recent surveys show many are vulnerable to an increase in mortgage interest rates.
There has been speculation in the press in recent months that under the new pension rules coming into force in 2015, many people will withdraw money from pension funds to buy BTLs. It would seem that they haven’t studied the small print – you will pay income tax on all pension fund withdrawals apart from the 25% tax-free cash, so managing withdrawals to minimise tax is really the name of the game. We can help with that.