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North London Rent Girl

Radio 4's Inside Money On Sipps

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Inside Money today was all about sipps and was very much counter to the hopes that bulls have been expressing on this site that the new sipps rules will bring a lot of new money into the market. The reasons it gave have all, if memory serves, been given on HPC before - the 50% limit on borrowing from your fund to get a mortgage, the very high transaction costs involved in putting existing property in (capital gains payable as seller, stamp duty as buyer), the fact that most management companies will insist on BTLetters paying a management agency that they approve of, that if you do it with your own residence you have to pay rent and that in either case you can't get your hands on any of the cash until you're 55. But this time it's from the Beeb, who can hardly be said to have been talking the market down! The pretty unequivocal conclusion is that the new sipps rules are really only of benefit to the very wealthy - goodness, tax rules that benefit the super-rich, surely not!! Interestingly, though, all this without any mention whatsoever of the risks of a drop in prices. This doesn't to me say that there isn't going to be a crash, only that sipps are a bad bet for anyone with a pot of under 200 grand even if you don't count the risks of a price plunge.

Anyway, here's the link to the site where you can read about/listen to the programme:


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the 50% limit on borrowing from your fund to get a mortgage

And according to this Times article you are not even allowed to borrow at all unless you have in excess of £75,000 already in your SIPP!


What is more, these are bribes that disproportionately favour the already well-off. Basic-rate taxpayers will win a discount of 22 per cent on their properties — barely half the gain to those in the top-rate bracket. And investors have to have at least £75,000 in their Sipps fund to qualify for the borrowing allowance. That will exclude much of the population.
Edited by zzg113

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What an excellent article - it comes to something when the times is berating the government for regressive tax policies - pinko-commie rag!!

Love this:

"It has taken the Bank of England two years to bring some sense into Britain’s crazy property market."

Yes, sense that it spent the previous five years completely removing!

I don't want to be paranoid but is there a chance that Gordon's taken a liking to US fiscal policy? That would be very scary - this might be just the start of tax rules that redistribute in completely the wrong direction. Let's hope it's just another new-labour, 'der, I never knew it was going to do THAT' stuff-up.

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  • 335 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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