He is a firm believer that, despite the beleaguered housing market as a result of the ongoing recession, falling pension annuity rates are increasing the appeal of property investment to millions of Britons as a way to fund their retirement.
This theory has been supported by recent media articles reporting that pension experts believe the practice was unfair on those who have diligently saved all their working life only to receive a lower return by many of the insurance companies.
According to Platinum Portfolio Builder who specialise in building buy-to-let property portfolios, many people have become confused about where their money is safe and the best areas to invest in order to provide for their retirement and achieve the greatest financial freedom.
This has meant a significant increase year on year in the number of clients investing in their passive investment models.
Continuing low interest rates have severely impacted income from interest and growth on savings, and like many others, Paul Cronin, an IT professional, and his wife Linda became increasingly concerned that their pension funds would not mature to the level they required.
Paul Cronin comments:
“we started to look into alternative methods and made the decision to invest in Platinum Portfolio Builder which offers an entirely passive investment where, for a fee plus an amount of working capital, a portfolio is bought for 25% below market value, refurbished, tenanted and managed on our behalf. The strategy is a five to ten year pension plan contribution and has provided us with a route to financial security.”
Paul and Linda will have a portfolio with a minimum equity which equates to a return on investment of around 18% per annum.
Nick concludes:
“Grant Shapps, the Housing Minister, recently announced he would end the era of booming house prices, in which people see property as an investment for retirement. However, the property market, like anything else, is subject to periodical peaks and troughs but has still averaged 4.9% growth per annum since 1970.
"Property, unlike shares which can be wiped out overnight, is tangible and always retains some intrinsic value.
"Therefore, even with a period of ‘house price stability’ as called for by the Housing Minister, property will certainly continue to increase over the medium to long term and I believe that 2011 will represent the best year yet for capitalising on this sector of the market due to the huge uncertainty which is still around.”
