Ever since the chancellor George Osborne announced plans to change the pension regulations on April 6th this year, there has been plenty of speculation about the decisions people will make over how to plan for retirement.
The changes mean that people have more freedom and can take cash in lump sums rather than annuities, and it has meant more options becoming available for older people. One such alternative to a traditional pension has been the buy-to-let market, which offers better returns for a new generation of pensioner than they could get from annuities.
At the moment, when the rental income is combined with capital appreciation of the property itself and the retention of the asset, it becomes clear that the property market is more lucrative for older people than traditional investment classes.
And now, according to one expert, those saving for retirement are going to increasingly start turning to one of the hottest assets – student property. In the last few years, it has become the darling of the investment market thanks to the strong returns it has to offer.
And Professor Mark Shackleton, from Lancaster University’s Department of Accounting & Finance, told North West Tonight: “One suggestion is that a lot of money will go into buy-to-let properties. And in this region, we’re just right next to some student accommodation for the university. That could be an alternative way to provide for your retirement, rather than buying an annuity.”
Student property has become more and more popular over the last three years, with 2012, 2013 and 2014 all having seen the sector attracting £2 billion worth of investment apiece. The return of strong application numbers since the initial decline after tuition fees were raised has meant that investors have been feeling confident about the market’s prospects.