When planning for retirement - how might equity release help buy-to-let landlords and property investors?
- 23rd October 2017
- Buy-To-Let Property News
How equity release can help retirees unlock door to buy-to-let investment
One of the main reasons why people invest in buy-to-let properties is to provide themselves with a steady income during retirement. But for those nearing or at retirement age already, funding a deposit for a new property purchase can prove problematic as mortgage lenders are less likely to advance the capital required due to their age, even if they are “asset rich”.
There could be a solution, however. Recent research by Retirement Advantage suggests that Buy-To-Let landlords might unlock latent capital in their principle property or unencumbered investment properties via equity release schemes, which could then be used to invest in buy-to-let thereby potentially increasing their retirement income.
Equity release enables those over the age of 55 (without a mortgage on a property) to get cash by releasing some of the equity from that property as money. This enables people to use the funds to make an investment in a buy-to-let property, rather than it being tied up in the existing property without delivering a return.
Stephen Ludlow, Chairman at ludlowthompson, comments: “A buy-to-let investment is one of the best ways to secure regular income during retirement. Residential investment property has performed as an inflation matching asset class that over the long term delivers consistent growth.”
“Equity release gives landlords the opportunity to start or grow their property portfolio - potentially enhancing their financial security, at an age when many mortgage lenders may refuse to lend them money.”
“As with any financial decision, people should seek advice from a qualified financial adviser, but equity release for this purpose could be a solution worth considering."
As with any financial decision, people should seek advice from a qualified financial adviser, but equity release for this purpose could be a solution worth considering.
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