Is Buy-to-let Property a Good Investment for Retirees in 2025?

Benefits of buy-to-let

• Being a landlord can give you a regular income.
• Properties can increase in value, so you may be able to sell for more than you bought.
• With increased demand for rental properties, you’re likely to find tenants quickly.
• Annual private rents in England increased by 6.1% in January 2024, and could continue to increase.

Risks of buy-to-let

• Buying a property comes with high upfront costs.
• You are responsible for maintenance and emergency repairs.
• Interest rates are typically higher on buy-to-let loans.
• Stamp duty is rising, especially for second properties.
• Prices often go up, but your property can also decrease in value.
• While mortgage rates seem to have peaked in 2023, they are also around 5% higher than previous years.

So, is a buy-to-let property a good investment for retirees in 2025? Or is it safer to rely on your pension?

UK pension changes in the UK For 2025

The government has confirmed that the new state pension will rise by £472 from April 2025. Under the triple lock system, the state pension goes up every year by 2.5%, earnings growth or inflammation - whichever is the highest figure at the time. The pension triple lock was introduced in 2010 to ensure the state pension didn’t lose value in the face of rising costs of living and wage income. The state pension is made every four weeks to people who are of retirement age and have paid enough National Insurance contributions over their working lives.

UK state pension changes 2024

In April 2024, the state pension went up by 8.5%. In real terms, this means people who reached retirement age after April 2016 will receive £221.20 a week for the full, new flat rate pension. If you retired before April 2016, you will get £169.50 a week for the old basic state pension.

State pension ages are rising

• If you were born between 6th October1954 and 5th April 1960, you start receiving your pension when you turn 66.
• If you were born on or after 5th April 1960, your state pension age is slowly rising to 67.
• If you were born on or after 5th April 1977, your state pension age will gradually rise to 68 between 2044 and 2046.
• There has been speculation that this increase would be brought forward to next decade, but so far this hasn’t been the case.

Whether buy-to-let is the right choice for you really depends on your unique needs. It’s a big decision, so luckily you don’t have to make it alone. Face 2 Face Financial Services can offer you clear, no-jargon advice to help you get what you need.