Introduction – this section will make it easier for you to define and plan your financial goals by summarising recent trends and characteristics of the UK property market. By the end of this uk property market section you should be able make a judgment on whether now is a good time to begin to invest in property letting.

Concerns Over Pension Returns – many people are now viewing property as their retirement fund because they have fundamentally lost confidence in the concept of a secure pension….  People are failing to save for their retirement. In 2005, economist noted an annual £57 billion shortfall in the Nation’s savings. The Governments recommendation is for everyone to work longer and save more money through optional means. However, it is your personal responsibility to make proactive decisions about your retirement and not rely on the Government to support you. The main reasons for most peoples pension shortfall are:-

• Mistrust - people mistrust of the management of financial institutions (following scandals like Equitable Life) and have reduced or not bothered to allocate a proportion of their monthly salary towards their pension;

• Poor Returns - occupational pensions have failed to payout what members expected. Huge company pension shortfalls exist because of falling equity markets! People simply perceive that pensions provide poor value (in terms of the investment returns);

• Confusion - people are confused about the myriad of ever changing, over complicated pension tax laws;

• Stock Market Falls - falling equity markets have devastated personal pension plans. Traditional Financial thinking relies on long-term projections (where stock market rises and falls counter each other out in a market that always goes up in the long term). However, you could be retiring and your personal pension could mature soon after a stock market collapse, where its value has also collapsed as a result;

• Inflexible - pensions cannot not always be passed on as inheritance – so people have diverted money away from pensions to more flexible investment vehicles (like property) that can easily be left to loved ones;

• Decline in State Pension - people don’t believe the Government will be able to financially afford to provide for state pensions as everybody lives longer, expects a higher standard of living and the population increases in size;

• Unpredictable - people recognise pensions are inflexible, in that no money can be accessed / enjoyed until you are at least 55/ and or pensionable age (which changes with Governments) – even then some form of annuity must be purchased – the success of which is left to the casino of stock market performance!