Financial Planning Resources

The comfort of bricks and mortar

For many people, buy-to-let was once the golden goose of retirement planning. It offered a sense of security, a physical asset you could point to, and a steady stream of income in later life. And let’s be honest, there’s something deeply reassuring about bricks and mortar. You can walk past it, inspect the guttering, and give the front door a fresh coat of paint. It feels real in a way that investments in funds or global equities often don’t.

When familiar becomes friction

But over the years, I’ve seen a shift. What once looked like a straightforward path to financial independence now comes with a great deal more baggage. There’s a growing list of landlords who find themselves burdened, not benefitted, by their property holdings. They haven’t become the source of comfort they expected in retirement. In fact, for some, it’s the part of the plan causing the most stress.

Part of the problem is how the landscape has changed. Costs have crept up steadily, mortgage interest, repairs, lettings fees, compliance requirements. Meanwhile, tax policy has been less than friendly. The removal of mortgage interest relief, tighter capital gains rules, and fully taxable rental income have all chipped away at the returns. The numbers often look a lot better in theory than they do in practice.

The illiquidity issue

And then there’s the issue of access. A property can’t be sold overnight. If you need to free up capital quickly, for an emergency, or just a shift in circumstances, you’re at the mercy of the market, the estate agent, and whether the boiler decides to pack in during the sales process. That’s not ideal when you’re trying to fund a calm and flexible retirement.

Concentration risk: too many eggs

There’s also the concentration of risk. Many people already have a large portion of their wealth tied up in their main residence. Adding another property can mean doubling down on one type of asset in one geographic area. That might be fine during boom times, but if prices wobble or the rental market softens, it can become a precarious position. (We discuss concentration risk in more detail on this episode of our podcast The Century Plan).

A place for property, not the whole plan

I want to be clear: I’m not against property. Far from it. I’ve known plenty of people who’ve done well from it, and I’ve helped them make good decisions around how and when to use property as part of their broader plan. But it’s no longer the sure thing it once was, and it’s important to consider whether it still fits your life as it is now, not as it was when you first bought in.

What I often suggest is this: if you’re starting to feel like your property is more of a weight than a wing, it might be time to look at other options. Investments that are more liquid, more diverse, and require less ongoing effort. Global index funds, for example, offer broad exposure to world markets at low cost. They might not have the same emotional pull as a house with a front door and a garden, but they do have the advantage of being easy to manage, easy to access, and incredibly well-suited to retirement income planning.

Rethinking what retirement really needs

Ultimately, retirement planning is about building a life that works for you. If property plays a part in that, great. But it shouldn’t be the only part, and it shouldn’t be the part that keeps you up at night. There are other ways to grow your wealth and generate income that don’t come with broken boilers and tenant disputes. And sometimes, all it takes is a fresh look at the plan to realise you’ve got more options than you thought

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Founded by Dennis Hall, Yellowtail are the trusted financial planners who advise affluent individuals & families in the South West and across the UK. Yellowtail’s experts provide the clarity, control and confidence to guide you through financial planning, estate planning, pension transfers and investment management directing your journey towards a prosperous retirement and financial peace of mind.