House prices to rocket up again in April
As from April 6 this year new pension rules apply that will allow pensioners access to all their pension pot. Previously there have been restrictions on the amount that they can draw down.
Many pensioners have been disillusioned with pension funds. A 65 year old with a pension pot of £100,000 can buy an Annuity that would provide an income of about £4,000 a year for the rest of their life but if they were to die at 68 there annuity will be gone.
What if they used their pot to buy property, possibly a Buy to let or Commercial property? This generation of pensioners now 65 have always found property a good investment.
First downside is they will be taxed on the money they drawdown, but then again they will be liable for tax on their Annuity.
In some parts of the country £100k will buy a terraced house that could be rented out for £6,000 per annum and in addition there could be property value could increase, this could make a nice inheritance for the children.
However we all know that buying and renting property can have its problems. Non payment of rent, property vandalised , periods of no income between letting, and of course the property will need to be insured and maintained.
Despite this it is expected that many pensioners will take the plunge into the property market and this will push up prices. If you are thinking of buying, buy now, if you are thinking of selling, hang on until later in the year.
We are in for an interesting period, all bets are on significant house price rises this year!