Sweeping changes to pensions next year will breathe new life into the regional housing market, says one of the West Midlands’ leading letting agents.
Dani James, chief executive of Worcestershire property management specialists Premier Places, has spoken out following George Osborne’s recent Budget where he revealed detailed reforms to tempt people to invest their nesteggs in property.
From next April, the Chancellor’s changes will see everyone in a defined contribution pension scheme able to access their entire pension pot at the age of 55.
Although it is still not possible to invest in housing directly with a pension fund, the changes will give people greater freedom to utilise their pension pots, taking the money out and scrapping the need to buy an annuity, said Ms James.
It will mean people have the capital they would need to invest in a buy-to-let property which many people across the West Midlands see as a better option to build their retirement fund.
Also included in the Chancellor’s plans was a drop in the stamp duty threshold on property bought through a limited company, which was reduced from £2m to £500,000.
Ms James, who is advising current and would-be landlords across the region on the changes, said: “The Chancellor’s Budget has, in many ways, given another shot in the arm to the property market.
“Property professionals have welcomed the stamp duty reduction but overall experts do not believe this will have much impact on the property market.
“Where Mr Osborne has really excited the lettings market is through his pension reforms. Giving people more freedom to access their pension pot early hands them new choices on how to spend the money they are putting aside for their retirement – with many interested in investing in bricks and mortar.
“That has been echoed by the British Property Federation who believe the reforms will give those spending their pension pots the flexibility to take some of their fund and invest in the property industry.
“With more options now available in the buy-to-let mortgages, coupled with the pension reforms, we could see further growth in the region’s property market.”