UK Pensioners have more property investment opportunities than ever before according to the latest Global Real Estate Outlook report from IP Global.
The research found that since pensioners were granted full control of their retirement savings in April, 70% have opted to drawdown all or part of their retirement wealth and are exploring investment opportunities that range from drawdown options to annuities to shares and bonds.
However, domestic and international property is topping the investment stakes with more locations emerging as potential hotspots for pensioners.
IP Global’s findings show the clear price surge in cities like Berlin, which saw a 10.01% rise, and the central wards of Tokyo, where investors have achieved a 13% return so far this year. In addition, growing rental demand in cities like Brisbane means that investors can expect a healthy yield of 5.4% per year. Supported by the strong British pound against the Euro and Japanese Yen, UK investors can not only obtain far more favourable purchase prices but also secure a continued income.
Domestically, London and most recently, Manchester, are leading the way, according to the report, with prices in Greater London increasing by 12% in the last year. In Manchester, a new property is still valued at less than half the average seen in London; however, prices are expected to rise to close this gap, with new projections putting Manchester price growth at a strong 26.4% up to 2019.
Following the uncovering of the property scam in Costa del Sol, where more than 500 investors were defrauded into £21 million of ‘handling fees’ to fake companies, many pensioners remain cautious of overseas property investment, which highlights the need to get professional advice.
Paul Preston, head of UK & Europe at IP Global, said: “Pensioners have worked long and hard to be secure in their retirement and they need sound, informed advice when making decisions about investing in property.
“Clarity about investment options and the reasons why they make sense is what advisors need to be sharing with this new pool of investors. From infrastructure developments to rising populations, pensioners have yet to hear the concrete reasons about which markets are seeing economic growth and how this connects to increasing returns from property.
“For investors, secure and sustainable returns are essential and property remains one of the few investments that can still provide this.
“Investing at home is an excellent option for a pension pot and the UK market continues to be a safe haven for investors.
“With the right advice, pensioners can also explore alternative investment locations, giving them greater security against regional market fluctuations and excellent returns. The benefit of this approach speaks for itself.”
