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27 Feb 2013

Majority Of UK Landlords View Their Rental Income As Supplementary To Pension

Many landlords in the UK are likely to use their property investments as retirement income, property news portal PropertyWire reported citing new research.

The vast majority (84%) of single property and portfolio landlords participating in the recent BM Solutions/BDRC Continental survey view their rental assets as a supplementary income to their pension, with 60% of respondents actively planning to live off their rental income at old age.

A very limited number of landlords intend to sell out their portfolio properties when they reach retirement. A total of 40% of those who claim that their property is their pension will decide on the basis of the state of the real estate market at the time they reach retirement.

The survey further revealed that rental yields dropped slightly to 6.2% in the fourth quarter of last year from 6.7% in the preceding quarter, with yields being highest in the East Midlands (an average of 7.1%) and lowest in Yorkshire and Humberside (4.6%). The Q4 2012 rental returns were unchanged relative to the year-ago period and when compared to the second quarter of 2012.

Strong tenant demand has pushed void periods to their lowest levels for over a year, with just 33% of landlords reporting void periods in the final three months of 2012 - down by 4% month-on-month and a 13% fall in annual terms.

The private rental sector remains an alternative source of long-term investment for landlords for old age and this trend is unlikely to change in the near future, said BM Solutions´ sales head Phil Rickards.

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