Referred to as A-Day, April 6th 2006 will be an historical date for pensions in the UK and will mark the beginning of one of the most radical changes in pension legislation for decades. It is because of this, that estate agents, developers, and any landlords looking to sell any suitable investment properties are encouraged to advertise their properties for sale now in the run up to this exciting day.
It will be the first time that a pension saver will be given ability to purchase residential buy to let property inside a SIPP (self-invested personal pension) and many industry experts are predicting a massive amount of interest from private individuals and pension fund managers that will want to be part of this potentially huge market. Keep up to date on SIPPS, investment property for sale and other issues relating to buy to let, as it could be an interesting time ahead.
For those looking to take their first step on to the buy to let ladder but not sure about all the technicalties surrounding SIPPS, it may be worth spending the next few months doing a bit of homework and looking at your current pension provisions. It may also be worth getting a simple buy to let guide to get a basic understanding and also looking at some of the different buy to let mortgage products available. As investors get more experienced and learn more about SIPPS and how they can benefit from it as a landlord, they can then decide at which point to take things further. Once A-Day arrives in the UK, and the activity starts for newcomers to the buy to let market, it is anticipated that this may generate another boom for UK investment property. Most importantly landlords will see this as another ideal opportunity to snap up good quality one and two bedroom first time buyer property especially if it falls below the stamp duty threshold price bracket.
For those not yet committed to the buy to let market, this will be an ideal opportunity to purchase a ready made buy to let with the advantage of earning income from day one if they purchase a property with tenants already in situ. For any landlords looking to sell their investment property, this media coverage surrounding SIPPS and A-Day, could create an ideal window of opportunity to sell their buy to lets as the demand is likely to increase for suitable investment property for sale. It may also be worth considering trying to sell investment properties with tenants in situ as investors will be keen to see properties knowing how they are already performing.
As a property investor concerned about cashflow and profit, the opportunity of selling an investment property with tenants in situ is that it can result in considerable savings during the sale process, not to mention that the landlord would retain the rental income whilst the property is being marketed. Plus, if the buy to let is sold to another property investor, they are less likely to be involved in a property chain and many experienced landlords have good relationships with buy to let mortgage lenders resulting in fast turnaround times for mortgage offers. The other benefits of selling your investment property with tenants in situ, is that it gives the newcomers to buy to let, the chance to purchase a ready made investment property without the normal set up costs associated with sourcing tenants, tenancy agreements, credit checks etc. If the property is managed through a letting agent, and the landlord sold the property to another landlord, the letting agent will be grateful to maintain the property under their management. Therefore, the new owner hasnt had the expense of souring new tenants, and paying the usual set up fees associated with letting a property. The letting agents retains responsibility for the property, the seller hasnt lost any income and finally, the tenants havent had to find alternative accommodation whilst the property is for sale. Its a win win situation. . If the new buyer decides to transfer the property into a SIPP at a later stage, then it is likely that there will be costs involved but a good SIPPS provider will assist in securing the right product for the investor.