With more people investing in property due to low house prices, landlords are using passive rental income as a way to fund their retirement rather than investing in a long-term pension plan. Current house prices are at their lowest for a decade and investors are choosing property over pensions.
Passive income or rental income is becoming a way for investors to plan for their retirement. First-time buyers are finding it harder to get onto the mortgage ladder because of high deposits and are now choosing renting while they save for a deposit. Every pound which is needed for a deposit is another pound in rental income. This makes rental income a great way to save for a retirement and with a home to sell on retirement, there is little to lose.
The UK has struggled with planning for retirement over the last few years and it is no secret that pensions are not quite the investment they once were. With a property, investors can track the value and dip in and out of housing booms and lows. There is far less risk and an investment in property is almost guaranteed to yield a passive income and provide what a pension used to.
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