View more on these topics

SIPPs are too costly, says Landlord Mortgages

Investing in residential property through a SIPP will be too costly for most consumers, says Landlord Mortgages.

Lee Grandin, managing director of Landlord Mortgages, says that SIPPs wont have a monumental effect on the residential property market that some people are predicting.

He says: “You would need a pension fund of at least 80,000 and to borrow an additional 40,000 to purchase the average UK buy-to-let property. From anecdotal evidence, I really dont think that most UK consumers have this sort of money either in their pension pot or their back pocket!

Grandin says that even if people could access that sort of capital, they can only contribute 100% of their salary or up to 215,000 (whichever is the lesser amount) into their SIPP each year. That means that, unless they already have sufficient funds in an existing pension, they will need to save for several years before even thinking about investing in residential property.

Grandin adds: “From the perspective of an existing landlord or even a holiday home owner, SIPPS are also not that exciting. In order to include a property you already own into a SIPP, you would need to sell it to the schemes trustees and potentially incur a huge capital gains tax bills.

“Anything, that encourages people to save for their retirement should be applauded but I really dont think that the new regulations for SIPPs will have a revolutionary effect on the residential property market or solve the pensions crisis.”

Recommended

Nationwide raises MPPI premiums

Nationwide has increased the premiums on its mortgage payment protection insurance. For 12 months’ cover, accident, sickness and unemployment has increased from 5.39 to 5.89, accident and sickness has increased from 2.79 to 3.29, and unemployment has gone up from 3.66 to 4.19 per 100 insured. For 24 months’ cover, accident sickness and unemployment has […]

The Famous Five will have to do their homework

The famous Five who quit HBOS will have to undertake meticulous research and preparation if their new lender is to launch successfully, Money Partners CEO Colin Sanders says. Earlier this month HBOS head of specialist lending Michael Bolton spearheaded a walkout from the group followed by Alan Cleary, sales director at Halifax Intermediaries, John Nixon, […]

New Homes Mortgage Helpline chooses MortgageStream software

New Homes Mortgage Helpline, the national new build mortgage specialist, has chosen MortgageStream to manage its new business pipeline, relationships and sales communications with customers. Paul Arnold, press officer for New Homes Mortgage Helpline, says: “We chose MortgageStream because of its essential integration to Legal & General Launchpad and Trigold. “This link streamlines our business […]

B&B warn over home security

Bradford & Bingley is recommending that home owners change their locks as soon as they move into a new property as this is the only way to be 100% sure of knowing how many keys there are to the property. People shouldnt just rely on insurance to protect them from the eventuality of theft using […]

Newsletter

News and expert analysis straight to your inbox

Sign up