Residential Property In A SIPP

Residential Property In A SIPP
Palau by Julian Cohen. Why?

Should Residential Property Be Allowed In A SIPP?

Residential Property In A SIPP

Don’t Miss The Chance To Have Your Say

In his recent budget, George Osborne stated the Treasury will consult on rule changes to allow people with self-invested personal pensions (SIPP) to hold residential property in a SIPP, by investing in empty commercial property that is converted to residential use.  Currently, it’s not possible to hold residential property in a SIPP.

The Treasury said in Budget Documents: ‘The government will explore with interested parties whether the conversion of unused space in commercial properties in high streets and town centres to residential use could be encouraged by amending investment regulated pensions schemes rules. Any amendments would need to be consistent with sound public finances and the government’s wider pensions strategy.'

Being Able To Hold Residential Property In A SIPP Is Fantastic News

Here are three reasons:

1. It will enable property developers to access the £100 billion currently invested in SIPPs for residential investment, to help ease the housing crisis. 2. It will enable some of Britain’s blighted high streets, where up to 15% of town centre shops stand empty, to be transformed from virtual wilderness ‘no-go’ areas into more vibrant places, in line with the Portas Report. 3. It will enable SIPP holders to enjoy more predictable returns on their SIPPs from rental income and long-term capital growth, compared with the volatility of stockmarket investment.

Commercial To Residential Development Is Already Happening Using SIPPs

SIPPclub has been involved with a number of developments, but red-tape presently plagues such projects, as the developments have to sold on before they become habitable.

In a similar way, SIPPclub currently helps residential property developers and investors get access to SIPP money for their projects through the provision of loans.  But changing the rules to allow residential property in a SIPP will be a whole new ball game. 

The Time Has Come To Hold Residential Property In A SIPP

It nearly happened in 2005, but Gordon Brown did an infamous U-Turn, scrapping the legislation at the eleventh hour.  Since then, the financial landscape has changed dramatically.  Now is arguably the perfect time to reinstate the right to hold residential property in a SIPP. 

Figures from HMRC show there were 52,000 commercial property transactions in 2011, the latest year for which data is available, worth a staggering £72 billion. It’s estimated only 1,000 would have been done by SIPP investors, indicating the potential surge in activity that could occur.

Like many SIPP operators, SIPPclub is firmly behind this initiative to allow residential property in a SIPP, as all parties stand to benefit.  There are, however, some SIPP operators that only allow stockmarket funds to be held within their SIPPs who are less attracted by this proposal, perhaps because they can see an outflowing of funds under management.  We would urge them to put self-interest to one side, and focus on the wider benefits.

Please Support This Initiative

We’d love to hear your view, whatever your position:

  • If you’ve ever considered investing residential property in a SIPP
  • If you’re a commercial or residential property developer or investor
  • If you’re a SIPP operator
  • If you’re a financial adviser

Please have your say by clicking the 'Vote Now!' button below.  We’ll ensure the information is passed on to the Treasury.

Should Residential Property Be Allowed In A SIPP?

Please Share This

If you’ve found this page of interest, please would you kindly send a link to it to your friends and colleagues using the buttons below.  You’ll be helping us out, and they might appreciate it too.  Thanks, it's much appreciated.

 

AJ Bell Is Often The Best Value SIPP For Stockmarket Assets

That's our opinion.  Not just because AJ Bell was the first company to offer an online SIPP.  Nor that it's received many prestigious awards.  And not even because the wife of SIPPclub's Founder has an AJ Bell SIPP.  It's because it's one of the most competitive stockmarket SIPPs on the market. 

Over time, charges can wipe out a huge part of your fund.  We like AJ Bell because there are no set-up costs.  If you hold passive funds, which is our preference, or shares, investment trusts, EFTs, gilts or bonds, you pay one small fixed fee no matter how large your fund.  And when you come to draw your benefits either as occasional drawdown or UFPLS payments, there's a small charge for the whole year no matter how many times you access your money (many SIPP and SSAS providers charge more than this for each payment).  However, you should always compare charges in detail, because AJ Bell could be more expensive than other providers, depending on the type of stockmarket assets you hold.

Visit AJ Bell

Get Valuable SIPP And SSAS Insights Emailed Directly To Your Inbox Every Monday

  • Please use an email address you can access. You can unsubscribe at any time.
IMPORTANT NOTE: NOTHING FEATURED ON SIPPclub IS EITHER AN IMPLIED OR A SPECIFIC RECOMMENDATION TO MAKE, OR TO REFRAIN FROM MAKING A FINANCIAL DECISION.  THIS PAGE HAS NOT BEEN APPROVED AS A FINANCIAL PROMOTION.

As SIPPclub neither advises on, nor arranges, nor recommends specific investments or strategies, we're unable to say whether a SIPP or SSAS or any investment within it is right for you. Ultimately, it’s your money and your decision, and you should only proceed once you're satisfied you've undertaken sufficient due diligence. If you need advice, you should speak to your trusted adviser, or you could find a local adviser from Unbiased.co.uk.  Alternatively, we'd be pleased to introduce to a suitably qualified independent financial adviser.

Please read our full Terms which includes criteria for SIPPclub membership.