Income from rental real estate – a good increase to pension

More and more owners of residential property in the UK are turning to the rental sector to receive a monthly addition to your income.

While the UK is looking for ways out of the economic crisis, people who are limited in their spending by low wage growth, are looking for ways to improve their financial position. More than 40% of those surveyed during the regular survey respondents said they use in addition to its basic earnings income from rent for the formation of the family budget. Especially notable is the shift in recent years there have been those citizens who use rental income as a Supplement to their monthly pension.

Absolutely all respondents stressed the importance of investing in real estate. This is not surprising. The share of the incomes of retired homeowners received from the rental of his property amounted to 62% in the total share of their pensions .

Many of the respondents, 4 out of 10 said they consider such variant – to hand over the property to rent after retirement. And quite a few people, only 4 % said that they would sell their property after they reach retirement age.

Many private owners of houses and apartments in the UK, before considering alternative methods of retirement planning, such as investment funds, shares – the vast majority admitted that they chose a residential investment property in the UK, because we believe in the best returns of their funds from such investments. Other reasons is the fact that real estate also plays a role long-term investment and the owner always expects to increase capital, as well as reliable protection of your financial stability with a small amount of pension.

Over the past quarter the average rental yield of residential property in the UK was 6.1% per year. For comparison, the average rental yield in Q4 2012 amounted to 6.2% in the fourth quarter of 2011 to 5.9%.

About 57% of cases, rent increases were recorded in connection with the fact that contracts were signed with new tenants, and 51% of the homeowners are not waiting for new tenants, but simply brought prices in line with market prices.

The highest data for yield shows the rental North East region with an index of 7.1%. And the most consistently weak data coming from Yorkshire and Humberside, where the level of the rental yield amounted to 5.6%.

The share of owners who have added property to your investment portfolio increased last quarter by 3% to 15%. However, landlords are becoming more selective.

The UK government, developing numerous measures to support lending to the residential sector in the country and the construction industry, looks forward to increasing the number of transactions from the homeowners and for this year, hoping that, about every fifth owner will gain at least one real estate object.

Not all homeowners spend their money on improving quality of life and daily needs. Many are trying to collect funds and invest as a long-term investment.

The study also noted that 38% of homeowners at least one month have not received income in the last three months. Periods of downtime associated with the natural fluidity of the market. Downtime was spent on finding good tenants to replace tenants who have left their homes.

In General, UK the same renters are renting one property about 3 years, and approximately one in ten tenant remains in your house or apartment 5 years.

® Helen Antre 13.06.2013.