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House Prices To Soar Next Year With New Pension Rules

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Analysts predict home values will rise to almost £190,000 in 2015, adding more than £12,000 to the price of the average home.

Experts claim the rule change could see as much as £5billion injected into the property market by people cashing in their savings.

From April, the legal requirement to buy an annuity with pension savings on retirement will be lifted and many people are expected to instead purchase properties that they will rent out to provide an income in old age.

Stuart Law, of the buy-to-let specialist Assetz, predicts a seven per cent increase in property values across the UK in 2015 on the back of stamp duty cuts and the pension reforms.

He said: “As property investment continues to outperform all other major asset classes we will see a surge in buy-to-let as people look to make the most of the cash in their pension pots.

“If half the estimated 200,000 people looking to cash in a percentage of their pension pots from April 2015 have £50,000 to invest in property that is an astonishing potential £5billion injection.

“Canny investors will be looking to build portfolios in the regions, especially the North, for cheaper prices and higher yields than in the South-east, to boost their income during retirement and generate a decent and growing nest egg to pass to their offspring.”

New analysis by insurer Direct Line For Business found a third of people aged between 45 and 64 with a pension would consider using some or all of their retirement funds to buy property. John Goodall, CEO of peerto-peer mortgage lender Landbay, said.

“The long term impact of annuity reforms will have a profound impact which isn’t yet factored into most models and predictions for house prices.” Headline figures from the Land Registry’s November House Price Index due out today show prices increased 7.1 per cent in the 12 months to November.

The official average value of a home in England and Wales rose to £176,581. Mortgage expert Dominik Lipnicki said: “Without doubt these pension changes will see more people entering the buy-to-let market. The game has changed.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “Strong rental yields mean owners can enjoy a healthy income with the added bonus of generous tax breaks, such as the ability to offset mortgage interest, maintenance and management costs against the rent.”

Some of those reaching retirement age may prefer to use their savings to pay down their mortgage. Others may not want the trouble of being a landlord.

But Richard Lambert of the National Landlords Association said the pension changes would make housing “a more financially viable option for providing an income in retirement” and would make homes available for “future generations”.

http://www.express.co.uk/news/uk/549326/House-prices-rise-people-invest-pension-pots-in-property

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If pensioners withdraw money from other asset classes that will reduce the price of those assets and create investment opportunities for others.

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Ohh Stuartzzzzz from Azzettzzzz youzzzz arezzz azzz totalzzz knobzzzzz

“Canny investors will be looking to build portfolios in the regions, especially the North, for cheaper prices and higher yields than in the South-east, to boost their income during retirement and generate a decent and growing nest egg to pass to their offspring.”

Cheaper prices do not equate to higher yield. The north has plenty of social housing. There is very little demand for private rentals.

Taking an example:

TS1 (Middlesbrough) 3 mile search radius:

http://www.rightmove.co.uk/property-to-rent/find.html?searchType=RENT&locationIdentifier=OUTCODE^2683&insId=1&radius=1.0&displayPropertyType=&minBedrooms=&maxBedrooms=&minPrice=&maxPrice=&maxDaysSinceAdded=&retirement=&sortByPriceDescending=&_includeLetAgreed=on&primaryDisplayPropertyType=&secondaryDisplayPropertyType=&oldDisplayPropertyType=&oldPrimaryDisplayPropertyType=&letType=&letFurnishType=&houseFlatShare=false

325 houses, 100 flats.

There are probably the same number again that are being let privately i..e not listed via an EA or Rightmove.

Pick any large Northern town and you'll get a similar result.

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' ♩ ♪ ♫ ♬ ♭ here we go, here we go, here we go, here we go, here we go, here we go, ♩ ♪ ♫ ♬ ♭ '

Come on lads, join in the 2015 party ♩ ♪ ♫ ♬ ♭ ...

It's propaganda time again .... ♩ ♪ ♫ ♬ ♭

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waznt he recommending US hot spots like Detroitz a couplez of yearz ago?

Seems he was.

To Pensioners.

http://www.thisismoney.co.uk/money/mortgageshome/article-2212155/Investors-warned-risky-rich-quick-property-schemes-U-S.html

Edited by Bloo Loo

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What's the average pension pot size? £30,000?

Does not compute!

£30,000 was a lot when you started saving, but is pi$$ today. I wonder why? <_<

Average shmaverage.

Thousands, maybe 10s of 000, have funds of 00s of 000s.

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Average shmaverage.

Thousands, maybe 10s of 000, have funds of 00s of 000s.

dont these pot averages include the notional pots top execs have in final salary schemes...ie, not pots at all.

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Canny investors will be looking to build portfolios in the regions, especially the North, for cheaper prices and higher yields than in the South-east, to boost their income during retirement and generate a decent and growing nest egg to pass to their offspring.”

You have to admire the way he's condensed his jedi mind control to the bare essentials.

waznt he recommending US hot spots like Detroitz a couplez of yearz ago?

Seems he was.

To Pensioners.

http://www.thisismoney.co.uk/money/mortgageshome/article-2212155/Investors-warned-risky-rich-quick-property-schemes-U-S.html

Thiz iz what pazzez az an eggzpert in the Exprezz now? What a stand up guy "buy-to-let specialist" Stuart Law of Assetz sounds.

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Surely no one would cash a pot big enough to buy a house as they would pay the highest rate of tax on it?

I might. Not quite at the age where I have that choice, but when I reach it I'll at least take a look at options for spending a year in a tax haven so I can access the pension fund without help from HMRC.

I may find the cost of the tax haven option negates what I might stand to gain. But for those with the biggest pension funds (particularly anyone exceeding the "lifetime limit" and thus incurring penalties), it looks like a no-brainer.

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Ohh Stuartzzzzz from Azzettzzzz youzzzz arezzz azzz totalzzz knobzzzzz

“Canny investors will be looking to build portfolios in the regions, especially the North, for cheaper prices and higher yields than in the South-east, to boost their income during retirement and generate a decent and growing nest egg to pass to their offspring.”

Cheaper prices do not equate to higher yield. The north has plenty of social housing. There is very little demand for private rentals.

Taking an example:

TS1 (Middlesbrough) 3 mile search radius:

http://www.rightmove.co.uk/property-to-rent/find.html?searchType=RENT&locationIdentifier=OUTCODE^2683&insId=1&radius=1.0&displayPropertyType=&minBedrooms=&maxBedrooms=&minPrice=&maxPrice=&maxDaysSinceAdded=&retirement=&sortByPriceDescending=&_includeLetAgreed=on&primaryDisplayPropertyType=&secondaryDisplayPropertyType=&oldDisplayPropertyType=&oldPrimaryDisplayPropertyType=&letType=&letFurnishType=&houseFlatShare=false

325 houses, 100 flats.

There are probably the same number again that are being let privately i..e not listed via an EA or Rightmove.

Pick any large Northern town and you'll get a similar result.

I think my Northern town (Huddersfield) is approaching PRS saturation point. Plus loads of new purpose built student accommodation. To the point that you can now pick up a one bed/studio rental for same as social (or thereabouts)

Edited by aSecureTenant

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What's the average pension pot size? £30,000?

Does not compute!

£30,000 was a lot when you started saving, but is pi$$ today. I wonder why? <_<

Then they'll be moaning to the press that they can't get a mortgage despite having no income.

Ohh Stuartzzzzz from Azzettzzzz youzzzz arezzz azzz totalzzz knobzzzzz

:D:D:D

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This.

Surely no one would cash a pot big enough to buy a house as they would pay the highest rate of tax on it?

Nail on the head. This is exactly why very few pensioners will get into buy to let.

The prospect of 40% tax on their pot will have them sprinting for the commode.

Edited by juvenal

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waznt he recommending US hot spots like Detroitz a couplez of yearz ago?

Seems he was.

To Pensioners.

http://www.thisismoney.co.uk/money/mortgageshome/article-2212155/Investors-warned-risky-rich-quick-property-schemes-U-S.html

Patricia Busaidy, 67, paid £28,500 to a U.S. firm. Local estate agents say houses in the road are now selling for £800.'

article-2212155-1552FD83000005DC-324_634

Some people will never be happy ....a lick of paint and it`s all good :unsure:

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Surely no one would cash a pot big enough to buy a house as they would pay the highest rate of tax on it?

Quite.....but some people are stupid.......who will give a mortgage anyway with no job and no income and sometimes existing debt and commitments.....BTL ha! to rely on a tenant and or housing benefit to pay the bills....good luck to that. ;)

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So, a pensioner with a BTL goes Alzheimers and is carted off to a home.

Then the LA seize his assets to pay for his care.

What happens to the BTL?

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What's the average pension pot size? £30,000?

Does not compute!

£30,000 was a lot when you started saving, but is pi$$ today. I wonder why? <_<

I thought the average pot was less than 30k, 18-19k were the figures being banded about when this idea first came out, not a lot to put into property but i suspect there will be a lot of pot combining money losing schemes started.

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Pensioners will absolutely see property as something tangible to hand on. Far more than a pension.

Not saying it's right.

They will not consider the tax to pay. They will only see the 'security'.

All assets are assessed by Council if family claiming care cost assistance. Those that need to be sold will be.

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Pension income could prevent a pensioner from claiming pension credit/benefits.

Pensioner cashes in pension and puts money in bank. Those savings prevent a pensioner from claiming pension credit/benefits.

Pensioner cashes in pension to buy a BTL. If they cannot let it and thus have no income, can they then claim pension credit/benefits?

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