Insurance News Archive
Sipps will have 'no impact on housing market'
It is thought that the introduction of self-invested personal pensions (Sipps) will have next to no impact on the housing market, according to latest research.
The Royal Institution of Chartered Surveyors (Rics) has commented that it expects only "a very modest uplift in house prices" as a result of Sipps, reports the website First Rung.
Milan Khatri, Rics chief economist, comments that this prediction of only a slight raise may be because of the drawback that Sipps present to potential investors.
Sipps are said to lack flexibility in terms of accessing funds and rental income and therefore may not be attractive to all higher-rate taxpayers.
Lee Grandin, managing director of Landlord Mortgages, shares the concern over Sipps with Rics.
He told the website that the advantages of investing in residential property through a Sipp will only be of interest to a "small proportion of the population" and that it is "simply too costly for consumers".
Figures show that consumers will need a pension fund of at least £80,000 and to borrow an additional £40,000 in order to be able to afford the average UK buy-to-let property.
© Adfero Ltd
21 Mar 2006