Is New Generation Hooked on Buy-to-Let?

Buy to let has long outperformed pension annuities and other savings when it comes to investing for the future. Healthy returns and a hands-off investment which allows time for individuals to still work full-time with a healthy social life is what attracts so many into the buy to let sector. As many as 48% of all Investabrix investors cite income for retirement as their primary reason for investing – but are younger people now starting to think about their retirement plans at a much earlier age? It’s a question more individuals than ever are faced with as the UK’s younger generation make serious decisions about what might be best for their future income.

Between the ages of 21 and 30, millennials may have always been looking to get onto the property ladder, but not necessarily for their own residence. There has been a significant rise over the last few years of younger investors enquiring about property for buy to let, as the returns that can be made not only provide a healthy income, but provide peace of mind for those thinking about saving for retirement.

Here are some of the benefits of investing in buy to let property that the younger generation can take advantage of:

— Getting onto the buy to let ladder with one property is just the first step. Investors are able to make returns instantly with a pre-tenanted property, allowing for a steady income which can be saved to re-invest at a later date.

— The earlier you invest, the longer you’ll have to watch your investment grow. The typical property cycle may result in property prices fluctuating from decade to decade, but over the past 20 years house prices have increased by over 280%*. Investing at the right time can result in serious capital growth gains.

— Property provides the best returns over any other investment type – younger investors can rest assured that building their portfolio at a younger age will give them a strong secondary income for the future and for their retirement.

Back in 2014, the government announced pensions would be accessible for those aged 55 and over, which saw a boost in the number of those using their pension savings to put into buy to let. Not only are the returns stronger than ISAs, annuities and other investment types, but the income from buy to let would help generate an additional income stream throughout retirement. The motivation that drives these younger investors may not be primarily on retirement when investing, but it certainly helps to consider all options which would be beneficial in later life.

A Word From Our Investors
We spoke to one investor on why he began building his property portfolio at the age of 30 – “I went to a seminar at the Etihad Stadium to find out more about how everything worked. Once I began speaking to the consultants, everything was very easy and clear on the emails I received and they broke down the returns and yields and everything. I invested in a property in Manchester knowing that the city is very up and coming for buy to let, and I also don’t live too far away so that made the decision easier.

“With property you can touch it and feel it – you can see exactly where your money is invested. I’m using the returns mostly for my pension and for the future in general, which includes currently growing my business. It’s great because I don’t have to worry about retirement but can also still afford to go on holiday a few times a year!”

If you’ve been considering a property purchase to set up your retirement, or you’re a new investor looking for some advice on building a portfolio, then Investabrix can help. We’re specialists in our field and our unrivalled knowledge of the buy to let market means that we are best placed to help you build a completely hands-off investment.

*increase of 282.66% based on average UK house price increase over the last 21 years.