Why Cashing In A Pension To Buy An Edinburgh Buy-To-Let Property Could Be A Sound Investment

Investing In property in edinburgh

If you have money invested in a pension, have you considered buying an Edinburgh rental property to grow your investment and provide a regular income?

If you’re aged 55 or over, you may be able to withdraw up to 25% of your pension tax-free while leaving the remainder invested until you retire. Interest rates in the UK are slowly creeping up thanks to repeated rises in the Bank of England base rate, but a property has the potential to offer a far better return, plus you’ll get a regular monthly income from rent payments.

Sharp Rise In Property Prices

Property prices have been rising sharply in the UK over the past couple of years since the COVID-19 pandemic. In Scotland, prices rose 10.8% between December 2020 and December 2021, with detached homes increasing the most (15.3%) and flats increasing the least (7%).

The average price of a house in Scotland is £181k, while in Edinburgh – recognised as one of the world’s most desirable cities to live – the average is a whopping £275k. According to the Scottish Government, property prices in Edinburgh rose 6.1% in the 12 months to December 2021, which is significantly higher than the return on most other types of investment.

Tax-Free Investment

Once you’re 55, you may be able to take a lump sum from your pension, releasing 25% of the investment without paying any tax. Some people choose to draw this down as a regular income, but it’s worth considering investing some in an Edinburgh buy-to-let property.

Property offers the opportunity to continue growing your investment while providing you with an income from monthly rent payments. A smart purchase in a desirable part of the city, such as a flat needing renovation can really pay dividends.

Where To Buy A Property To Let In Edinburgh

The key to property investment is knowing where to buy. The most desirable areas change over time and identifying an up-and-coming area before prices rise too fast can boost your investment return. To get a good gauge on this, we would always recommend seeking expert advice from a letting agent with their finger on the pulse of the local market.

Knowing the most popular property type will also help you make the right decision. The advent of home working means many people now want extra room for an office, and a desire for outside space has replaced proximity to public transport when getting to the office was a priority.

Ask The Edinburgh Letting Experts

At Clan Gordon, we have more than 15 years’ experience in the Edinburgh property market. We manage property portfolios for dozens of investors and look after more than 500 rental homes across the city.

Our experience and expertise mean we know the areas that give the best rental yield – and the hot spots to avoid! Often we find out a property is being put up for sale before it goes on the market, and some of the most desirable homes often change hands without being advertised, so we can make sure you don’t miss out.

If you’re considering investing in an Edinburgh buy-to-let, schedule a call with one of our expert property advisors, and we’ll take it from there!

The value of any investment including property may go down and you should never withdraw money from a pension without seeking independent financial advice.




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