Agents are reporting a high level of interest from new landlords who are typically first-time, retirement-age, buy-to-let investors. A recent major study of 20,000 households suggested a steadily increasing proportion of savers plan to use buy-to-let houses as a way of funding their old age.
The Office for National Statistics found 42% of respondents considered property as the secret to creating the largest possible retirement fund, up from 32% in 2010.
Worryingly, many have little or no experience of dealing with tenants. They share many of the characteristics of accidental landlords.
According to Peter Armistead of Armistead Property, the big worry is that tenants will get a raw deal: “Many retires are finding they can easily use equity in their residential property or money from a pension pot to fund a deposit. They can also claim tax breaks on mortgage interest and other expenses, so buy-to-let is very appealing.
However, many are inexperienced in the rental market and may be unaware of the legal, financial and ‘duty of care’ responsibilities they face. There is a myriad of legislation governing tenanted properties and it is very easy for the uninitiated to fall foul of the law.
For example, boiler and gas appliances checks need to be done annually for rental properties. Landlords also have a legal responsibility to minimise fire risk with the installation of fire alarms; provision of fire proof furniture and fire extinguishers; and accessible fire escapes.
Unless they take a professional and well informed approach to letting property, it is likely that the quality of accommodation, property maintenance, safety and communications with the tenant will be substandard and may put lives at risk. Retiree landlords need to take their responsibilities seriously and get expert help to manage their properties. This will ensure they are compliant with all of the legal requirements and that their tenants are managed professionally.”
