As part of the 2014 Budget, the Chancellor announced a huge change in pension rules by stating that retirees can now draw their entire pension pot rather than having to purchase a retirement annuity. This has major implications for over 55s who are considering which steps to take next with their pension as it gives them a freedom of choice which was previously unavailable.
One of the options that people will increasingly consider is buy-to-let property as it will provide them with a stable monthly income as well as giving them an asset they can pass on to their children.
In the UK, the property group widely thought to be the strongest is student accommodation due to the flourishing higher education market. This means that demand for purpose-built accommodation is at an all-time high which is undoubtedly going to continue due to increasing numbers of students in the UK, a natural decrease of the older university stock and the movement of students away from traditional shared houses.
Select Property recognised this trend early on and subsequently the main buy-to-let property that we offer in the UK is from luxury student property provider Vita Student. The model works by investors buying off-plan studio apartments in one of the UK-wide developments where prices start from around £75,000.
Once the development is open they receive a guaranteed 7% rental yield every year for five years which is based specifically on predicated rental rates. The newest opportunity is called Vita Student at Telephone House in Sheffield where there are 63,000 students clamouring for suitable accommodation.
The strength of the returns that can be made from student property means that the Vita Student buy-to-let products have proved extremely popular with investors, and we are anticipating to experience an influx of enquiries following the recent Budget announcement.
They key is for people to have the confidence to follow a new course – crucially people who now find themselves in the position where they can choose what to do with their pension pot can be satisfied that the road of student buy-to-let is well-trodden and is increasingly proving itself as a robust investment choice.
To find out more information about Vita Student through its exclusive sales partner Select Property, visit the Select Property website.
Taking the plunge with a new pension plan
Jeff Elder, 73, a retired executive search consultant in Oxfordshire has been looking for a way to diversify his investment portfolio. He currently has money in several different funds, shares and savings schemes but has never invested in bricks and mortar before as he simply hadn’t found a satisfactory model. This changed when he was sent some information about Vita Student.
Jeff explains: “With interest rates so low at the moment I had been looking for another way to save and diversify my investment portfolio. After examining the company and the student property sector I realised that the yields that can be achieved are stronger than any other property group – and indeed any savings group at the moment. Vita Student’s luxury proposition stacked up well with my market research and the assured 7% rental return for five years put my mind at rest that my money would be working hard for me.
“As this is my first foray into the buy-to-let market it is also important that it is a fully-managed investment; I’m currently enjoying my retirement so I don’t want to have to deal with the hassles usually faced by landlords like maintenance issues and finding tenants.
“Quite quickly I took the plunge and bought two studios in Bristol and Exeter. Now the purchases are complete I’m confident I made the right decision and I’m looking forward to seeing a return on my money.”
