PRS reforms will put landlord retirements in jeopardy, new report highlights

The potential folly of the Government’s decision to bear down on the private rented sector once more is highlighted by new research from estate agency Savills.

It reveals that over half of private landlords view their properties as a pension pot, and that these homes produce an estimated net income of £10.1 billion a year for nearly half a million households over the age of 65 (in England).

Rented property is also due to become an increasingly important income for those aged from 55 to 65 years old as the landlord population ages in the coming years, with 11% expecting income from their portfolio to be their biggest income.

The data which comes both from Savills research and official figures, suggests that the current Government is playing with fire as it prepares its Renters Reform Bill.

Renters reform

The proposed changes, which include significant alterations to tenancy conditions and evictions and increased regulation largely in renters’ rather than landlords’, are likely to concern millions of landlords expecting to rely on a PRS property for their retirement income.

“Buy-to-let investment has been an attractive way to supplement or build up retirement savings over the past 20 years, especially for the self-employed” says Lucian Cook (pictured), head of residential research at Savills. 

“Many are proclaiming that the golden age of buy-to-let investment is over because of increased regulatory requirements, a higher tax burden and the prospect of further increases in the cost of debt.

“But it is set to play an increasingly important role in providing pension income, with many landlords, who were at the forefront of the buy-to-let explosion of the noughties, now hitting or approaching retirement age”.

Read more: Is Government legislation killing buy-to-let, asks Tom Entwistle.