edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
3 replies 5.7K views
georobgeorob Forumite
18 Posts
hi all
i have the chance to purchase a nice house that is ideal for letting in a very desirable location(holiday let)
can i now buy the house using my company pension?ie selff invested in residential property
i already have a mortgage on my house
or what would be an alternative strategy?
i m open to any suggestions
the house would cost approx £150k
thanks ::) ::)
if i had known then what i know now


  • lisyloolisyloo Forumite
    27.1K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    There is evidence that house prices are starting to drop (see the latest Righmove survey(.

    How much research have you done into this?

    Interest rates are rising, house prices may drop and could be significant, rental yields are typically low at the moment.

    A very bad time to invest in property IMO (unless you have done lots of research and are positive that you have found a great location).
  • georobgeorob Forumite
    18 Posts
    the weekly rental would be approx £400-£600 but occupancy would be initially slow
    the house is in a town with fantastic tourist growth potential due to local garden opening to the public
    if i had known then what i know now
  • PalPal Forumite
    2.1K Posts
    I have not looked up the proposals re pensions and buy-to-let for a while (because it is a bit dull) but my understanding is:

    - it is still only proposals, so you cannot do it at the moment. ETA about 2005 I seem to recall;
    - when the new rules come in you will only be able to borrow 50% of the purchase price, so you need to have a pension fund that is worth at least half the value of the property (£75,000).

    This latter point means that you are tying up a lot of your pension fund in a single asset (which as Lisyloo says may fall in value). You also cannot borrow as much towards the purchase, meaning that you cannot leverage any profit margin to the same extent that you might if you were not using your pension fund, so it will take a lot longer to pay you back the original deposit money, which kind of defeats the objective of BTL really.

    At first glance the margin looks reasonably good though. How many weeks p.a. do you think you will be able to rent for?
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