Disappointment at government U-turn on SIPPs

Following the chancellors pre-Budget Report, residential investment specialist Vivacity says it’s disappointed in the U-turn on including residential properties in self invested personal pensions.

Simon Halls, managing director of Vivacity, says: While we had always shared some concerns over the inclusion of overseas property and second homes as a suitable asset class for pension investment, the decision to prevent direct ownership of residential investment property seems a remarkable turn around from the previous treasury position.

“It is frustrating for all those operating in both the financial services industry and the residential investment industry who have invested significant resources in the run up to A Day.

However, Vivacity has always maintained this was never likely to be a niche market and some of the estimates as to volume of acquisitions seemed wildly exaggerated. We are still seeing good levels of interest from investors prepared to take a mid to long-term view on residential property.

“Many thousands of people have invested in the residential market over the past decade without the tax efficient benefits of the pension environment and the long-term fundamentals of this asset class remain very strong.

Vivacity remains upbeat about the continued overall viability of the buy to let market, claiming the future looks bright for Real Estate Investment Trust.

Halls says: It was pleasing to see a further move toward the creation of REITs and although there is much further detail to be announced, this tax efficient investment vehicle is likely to offer significant investment opportunities for both corporate and individual investors in the residential market.