The i Paper: Does BTL still make sense as a pension alternative?

Daily talks with our Landlords are showing they are unhappy with their retirement plan seemingly being taken away from them - but is it being completely taken away? Or do we need to look at BTL as a retirement option in a different way from now on? Not the quick buck money spinner it used to be.
A change of mindset is needed.
A new wave of client is starting to come forward and we are speaking to many first-time landlords testing the water with a good plan for some additional future income.
They are not frustrated with the way BTL's have changed over the years, being new to the market they only know the current rules and understand that like most investments, they should be viewed more long-term.
The income can still contribute to their retirement but are clear some short-term sacrifices may be required.
"You only get out of life what you put in" This is now true for life, pensions and BTL's.
Seek appropriate advice and consider paying your BTL down when you can

Buy-to-let has never made sense as a total alternative to a pension, but can complement your retirement strategy, especially if you have more than £60,000 per year you want to save for when you're older. The various tax changes over the last decade have made buy to let less favourable, with increases to stamp duty and decreases to tax reliefs for investors. Now capital gains tax allowances have been cut too.

Compare this to a pension, where you get full tax relief on the way in, no capital gains or income tax in your wrapper, no inheritance tax and 25% tax free on the way out. Of course, the rest of your income is taxed, but so will your buy-to-let income. The removal of the lifetime allowance is now the cherry on the cake for pension investors.

Was buy-to-let ever really a wise pension alternative? Whenever I am asked I will always tell people that buy-to-let can form PART of a retirement plan and that it should be used in conjunction with other forms of savings and investments, including pensions, to give you the best overall chance of a well-funded retirement. It simply comes down to the age-old adage of not having all your eggs in one basket.

Btl's are still a great model, with the demand for quality living conditions at an all-time high and the ability to accommodate through local housing and council at a time low. What has to be considered is the day-to-day cashflow position for this property strategy as the mortgage rate tumbled out of control in 2022 Q4 and remind higher than the previous years the stain on landlords to main investment margin has led to many considering cashing in.
With clever planning and continuing to focus on quality housing for quality tenants with rental to reflect this, our clients are still seeing a positive position in their portfolios. Shortages in this basic area of housing should see continued rental growth and positive returns, it is interesting to understand our client's journey of Interest only or capital repayment as mortgage-free retirement is great retirement - especially if your investments are unencumbered and full retention of income.

Buy to Let investments, in our opinion, still form a very sound part of client's investment and pension portfolios - no matter how small these are. To rely solely on fund performance for your future isn't sensible and the flexibility of single occupancy buy-to-let's, houses with multiple occupants, units where shops form the lower parts and flats form the upper parts have proven in recent years a great stabiliser through the pandemic, the Ukrainian war, and the "went a bit too far" mini-budget. All investment strategies need a balance of high risk, medium risk, and guaranteed deposits - we see property investment as a medium risk over the medium term.