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Fred

April 1st Pension Change?

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I was speaking to my god parent lastnight and he says that on April the 1st (I think that was it) people will be allowed to put money from their pensions into a house to rent out tax free.

Is this true?

If so how will that affect house prices? (as lost of people will be wanting to buy houses around 100K)

ps. A did a search on the forum for this but could not find anything.

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Yeah, you wouldn't have read anything about it, all a bit hush hush, for people in the know.

But this one's gonna be big, and I mean BIG. Hundreds of billion of pounds are going to flood into the property market, and the experts are predicting a similar growth in house prices in the next five as the last five years.

Get in now before it's too late. House prices today will look dirt cheap in a couple of years. Added the drop in interest rates and London winning the Olympics, the boom times are back.

ps. You can't go wrong with Stratford.

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I was speaking to my god parent lastnight and he says that on April the 1st (I think that was it) people will be allowed to put money from their pensions into a house to rent out tax free.

Is this true?

If so how will that affect house prices? (as lost of people will be wanting to buy houses around 100K)

ps. A did a search on the forum for this but could not find anything.

Search for 'SIPP' and you'll find a lot of threads.

Lots of people here think it won't bring a lot of new money in to the market. I'm taking a 'wait and see' approach but I do think it will be very positive for sentiment (at least initially) and will delay any falls. I'm quite concerned about its effect - more than most on here.

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I was speaking to my god parent lastnight and he says that on April the 1st (I think that was it) people will be allowed to put money from their pensions into a house to rent out tax free.

Is this true?

If so how will that affect house prices? (as lost of people will be wanting to buy houses around 100K)

ps. A did a search on the forum for this but could not find anything.

Yep it's called a SIPP.

But just for starters here's a few bits of detail.

1. You can only borrow 50% of the value of the house , so if you spy a property for say £100k you'd have to have £50k in your pension to start with.Of course this will also mean that if this is your whole pension fund then you will be 100% in property when most 'experts' say your exposure to property in a pension should be around 12%-15% from what I hear.

2. "ah but I already have a BTL and can just put straight into my SIPP on April '06" I hear you cry. This is of course true except for one thing , you have to SELL it to your SIPP thus incurring CG tax and probably stamp duty. Not forgetting of course the money to make such a transaction in your SIPP , plus of course spare capital for 'void ' months and running costs.

3. Once you have a property in the SIPP YOU dont own it any more because of the way it is structured , it will be owned by the 'Trustee'. Lets say you fell on hard times and you had a mortgage within the SIPP and no money to pay that mortgage. Firstly of course you couldnt sell it and extract the money as it is a pension , you 'd have to wait until you're 55 to start to do that ( think that comes in next year ) . Secondly as I'm aware the 'Trustee' would be within his rights to sell your SIPPed house to realise the capital to cover costs and any payments due on the mortgage - even if that meant selling at a loss!

4. Even the Government came out last week and said that SIPP's were really only for the more 'wealthy' individuals - ( well what do you expect from NU-Labour , you didnt think they were for the common man did you ? )

That is just a few details of A day and Res/property in SIPP's

PS: The average penison pot in the UK is £30,000 , so add a 50% mortgage of £15,000 to that and you have a whole £45,000 to go and spend on your first BTL.

Dames

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It all boils down to the $1billion question: -

Were's the cash going to come from to fund the SIPP's scheme?

Most people are over-borrowed as it is

SIPPS was just a ploy by Gordon Clown to kill two birds with one stone:

Solve the pension fund crisis & continue the house-price boom. Unfortunately, he's clutching at straws..................... :(

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Yep it's called a SIPP.

But just for starters here's a few bits of detail.

1. You can only borrow 50% of the value of the house , so if you spy a property for say £100k you'd have to have £50k in your pension to start with.Of course this will also mean that if this is your whole pension fund then you will be 100% in property when most 'experts' say your exposure to property in a pension should be around 12%-15% from what I hear.

2. "ah but I already have a BTL and can just put straight into my SIPP on April '06" I hear you cry. This is of course true except for one thing , you have to SELL it to your SIPP thus incurring CG tax and probably stamp duty. Not forgetting of course the money to make such a transaction in your SIPP , plus of course spare capital for 'void ' months and running costs.

3. Once you have a property in the SIPP  YOU dont own it any more because of the way it is structured , it will be owned by the 'Trustee'. Lets say you fell on hard times and you had a mortgage within the SIPP and no money to pay that mortgage. Firstly of course you couldnt sell it and extract the money as it is a pension , you 'd have to wait until you're 55 to start to do that ( think that comes in next year ) . Secondly as I'm aware the 'Trustee' would be within his rights to sell your SIPPed house to realise the capital to cover costs and any payments due on the mortgage - even if that meant selling at a loss!

4. Even the Government came out last week and said that SIPP's were really only for the more 'wealthy' individuals - ( well what do you expect from NU-Labour , you didnt think they were for the common man did you ? )

That is just a few details of A day and Res/property in SIPP's

PS: The average penison pot in the UK is £30,000 , so add a 50% mortgage of £15,000 to that and you have a whole £45,000 to go and spend on your first BTL.

Dames

You forget the maximum you can add into a SIPP is 100% of your gross salary per year. So even if you did have 100k lying around, you couldn't just put it into a SIPP (unless you earn 100k per year in this example).

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You forget the maximum you can add into a SIPP is 100% of your gross salary per year.  So even if you did have 100k lying around, you couldn't just put it into a SIPP (unless you earn 100k per year in this example).

Quite corect Jason , I was just trying to give a few pointers to the the poster.

Another factor as I'm aware is that a lot of the SIPP providers are going to want property management teams looking after the porfolio , so more costs to come out of the coffers.

Dames

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Yep it's called a SIPP.

But just for starters here's a few bits of detail.

1. You can only borrow 50% of the value of the house , so if you spy a property for say £100k you'd have to have £50k in your pension to start with.Of course this will also mean that if this is your whole pension fund then you will be 100% in property when most 'experts' say your exposure to property in a pension should be around 12%-15% from what I hear.

2. "ah but I already have a BTL and can just put straight into my SIPP on April '06" I hear you cry. This is of course true except for one thing , you have to SELL it to your SIPP thus incurring CG tax and probably stamp duty. Not forgetting of course the money to make such a transaction in your SIPP , plus of course spare capital for 'void ' months and running costs.

3. Once you have a property in the SIPP  YOU dont own it any more because of the way it is structured , it will be owned by the 'Trustee'. Lets say you fell on hard times and you had a mortgage within the SIPP and no money to pay that mortgage. Firstly of course you couldnt sell it and extract the money as it is a pension , you 'd have to wait until you're 55 to start to do that ( think that comes in next year ) . Secondly as I'm aware the 'Trustee' would be within his rights to sell your SIPPed house to realise the capital to cover costs and any payments due on the mortgage - even if that meant selling at a loss!

4. Even the Government came out last week and said that SIPP's were really only for the more 'wealthy' individuals - ( well what do you expect from NU-Labour , you didnt think they were for the common man did you ? )

That is just a few details of A day and Res/property in SIPP's

PS: The average penison pot in the UK is £30,000 , so add a 50% mortgage of £15,000 to that and you have a whole £45,000 to go and spend on your first BTL.

Dames

And you can currently invest in commercial property inside a SIPP at the moment anyway, but the amount you can borrow is also more generous at 75% of the purchase price. So in some respects the current regime may be better.

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It all boils down to the $1billion question: -

Were's the cash going to come from to fund the SIPP's scheme?

Most people are over-borrowed as it is

SIPPS was just a ploy by Gordon Clown to kill two birds with one stone:

Solve the pension fund crisis & continue the house-price boom. Unfortunately, he's clutching at straws..................... :(

The idea of SIPPS was to encourage pension saving .....but like stakeholder pensions it'll just become a nice tax break for the well off........

as the less well off can't afford to do it.........and they were the ones it was aimed at.......to prevent them relying on income support when retired.....

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  • 336 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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