Down letting - tips for utilising your family home in retirement (ARLA)

Downsizing has become common practice in freeing up capital, but selling off the family home may not be the only way to subsidise hard-hit pensions.

"With many potential buyers struggling to secure a mortgage, letting your family home rather than selling offers a strong alternative," said ARLA's President, Tim Hyatt.

"Rental returns stand at an average of 6.1 per cent this year, according to research from Knight Frank. This substantially beats the returns on many other current investment opportunities.

"ARLA members also report that achievable rent levels are increasing, while demand for good quality rental properties remains high. While market conditions remain so inclined, it could be prudent to let out the family home, and use the monthly rental income to invest in renting a smaller retirement home."*

According to ARLA research, 'renting to retire' is also a key motivating factor in the buy-to-let market. For example, more than two fifths (42%) of today's landlords originally invested with a view to creating a retirement 'nest-egg'. **

See our top tips on "down-letting" a property to rent for the first time here.

*According to the ARLA Members' Survey of the Private Rented Sector, Q3 2011

**According to the ARLA Survey of Residential Investment Landlords, September 2011