Peter Grant: Pension rules boost from buy-to-let

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As the new pension regulations come into force today, giving those of pensionable age greater 
 flexibility with their savings, the debate continues as to the merits of investing all or part of your pension cash in property. It’s reported potentially 16 per cent of the estimated 200,000 expected to cash in their pension will choose to invest in residential property.

From September to December last year, Grant Property Investment saw a 28 per cent increase in property sales (compared to the same period in 2013). I’m confident those who carefully invest in prime buy-to-let property will continue to be rewarded with strong returns. Prior to undertaking any such investment we always advise our clients to seek independent financial advice. Those of pensionable age need to be aware of potential tax implications. For those who do enter the market, there’s certainly the potential to enjoy higher returns than the standard three-four per cent you may receive when buying an annuity. Though you can’t readily realise such an asset at short notice, investors own an asset that can substantially grow in value.

The key is knowing how and where to invest. As a business, we only source prime traditional Georgian and Victorian properties in areas that have high occupancy and can produce a high rental yield. Consequently, on behalf of individual and institutional investors we are very active in 12 UK cities, including Edinburgh, Stirling, Dundee, Glasgow and Aberdeen.

We expect to see traditional residential properties in Edinburgh’s prime locations such as Marchmont, Bruntsfield and Morningside offer a solid return and increase in value by a further three-five per cent in 2015. Rental yields in these areas can be six per cent-plus, compared with London which sees yields of just two-three per cent in prime areas.

If investing in property is right then the team at Grant Property Investment offer a unique “end-to-end solution” with the sourcing of the property, renovation, furnishing, rental and management all handled by us for the client.

Buy-to-let will remain a standout investment for 2015, especially in hot-spots like Edinburgh. Investing in a prime buy-to-let property gives you and your offspring an asset and potentially rental income higher than returns from an annuity. Invest well and today’s retirees and their families could be reaping the benefits for years to come.

Peter Grant is CEO of Edinburgh-based Grant Property Investment. Visit www.grantproperty.com