Paragon: B2L should be held in pensions

The buy-to-let specialist lender commended the freedom the Chancellor handed to savers in his 2014 Budget, but felt they should have further freedoms when building their pension.

John Heron, managing director of Paragon Mortgages, said: “The vast majority of landlords hold just one or two properties to augment other savings and investments, but buy-to-let property is unusual in that investors cannot currently hold their buy-to-let property in their pension.

“The last Labour government did look at this but failed in the final analysis to deliver.”

The private rented sector has grown considerably due to the demand for housing, which can no longer be satisfied by owner-occupation, local authorities and housing associations alone, in addition to developments in buy-to-let lending.

Research from Paragon Mortgages in 2013 revealed that three quarters of landlords state their properties double as their pension, as 65% plan to live off their rental income when they retire.

Heron added: “Having given more choice to how we take our pension benefits, the government should consider how we can be given more flexibility in building our pension savings and allow individuals to include in their pension the one asset that many investors regard above all others, an investment in housing."