Property as a pension

**DimPrawn** · 18 September 2016, 11:00

Property is not the best way to save for retirement and savers should focus on their pension instead, the head of the Financial Conduct Authority has warned.

In a speech delivered on Friday the City watchdog's boss, Andrew Bailey, said investing too much of someone's retirement fund in property could be "self-defeating" as the potential to make money over the long-term is uncertain.

Or to put it another way. If you invest your money in property, as opposed to pension funds run by City bankers, there is little scope for the banking industry to cream off all the profits in the form of entry fees, exit fees, ongoing fees and poor/opaque valuations.

**blackeye** · 18 September 2016, 16:07

People invest in property because of the ability to leverage.

If I could put up £10k of my own money and get a bank to give me £190k extra to put on a global tracking fund for 25 years, I would do that instead...

**kaiser78** · 18 September 2016, 18:55

Balanced portfolio and all that.

**scooterscot** · 18 September 2016, 19:00

Originally posted by kaiser78 View Post

Balanced portfolio and all that.

With properties in Europe, Asia, America - tick!

**jessaragen** · 21 September 2016, 09:24

My parents are considering the idea to buy a flat in Barcelona to rent it out, it seems quite profitable : 5-6% yields, hah?

**ChimpMaster** · 21 September 2016, 12:29

Originally posted by jessaragen View Post

My parents are considering the idea to buy a flat in Barcelona to rent it out, it seems quite profitable : 5-6% yields, hah?

You can get 8 or 9% yield on properties in Slough, along with decent capital growth.

Yes, seriously.

**OwlHoot** · 21 September 2016, 12:35

Originally posted by ChimpMaster View Post

You can get 8 or 9% yield on properties in Slough, along with decent capital growth.

Yes, seriously.

and if there's a garden shed, you can pack another family in and get 12% yield!

**LondonManc** · 21 September 2016, 13:12

Don't use property!

What should we use then, shares in MFI, Woolworths, banks?

**MrMarkyMark** · 21 September 2016, 13:15

Originally posted by jessaragen View Post

My parents are considering the idea to buy a flat in Barcelona to rent it out, it seems quite profitable : 5-6% yields, hah?

They'll find it quite tricky if they wish to be legal and above board.
They are not issuing any new permits for people to rent holiday property there.

https://techcrunch.com/2016/09/19/ai...legal-rentals/

Obviously, this is all couched as caring about rental rates / prices for local people, rather than the mayor being in the hoteliers pocket

Property as a pension