Jump to content
House Price Crash Forum
Sign in to follow this  
Guest Riser

Hips And Sipps - Telegaph Still Banging On

Recommended Posts

Guest Riser

Another SIPPS report predicting a boom in property prices on the back of SIPPS introduction next April

This is all just spin to prop up the crumbling housing market, the market has now turned and as it falls it will take the economy with it.

Hips and Sipps could rock the property boat at home and abroad - Telegraph

An Englishman's home is his castle, no matter where in the world it happens to be. There has been a long-standing love affair with property in Britain - just look at the number of people who indulge in "property porn", lusting after glossy property sections containing houses they cannot afford.

For many, the house price boom we have seen in the last decade has made it difficult to get over the ramparts. But things are changing.

Property price growth has been slowing in the past year. According to the Halifax House Price Index, it rose by 1.6pc in August.

In the first eight months of this year, house prices have risen 2.1pc, compared with 12.5pc in the same period of 2004. This is a more sedate pace, and well below earnings growth. So, even if it is only for a short time, people's property dreams will seem more attainable.

Lending rose too, with mortgage approvals reaching 101,000 in August, up from 96,000 in July.

Prices are feeling more realistic than this time last year. Even so, the average home now costs £165,967 according to Halifax.

This is all good news for anyone looking to augment a property portfolio, who would be wise to consider their options now before prices accelerate again.

You may not believe there is much on the horizon to make this happen, but think again. Many experts predict a further cut in the Bank of England base rate by the end of the year, which is likely to boost prices once more, even if only temporarily.

A far greater push is likely to come from changes to pension legislation coming into effect from April.

For the first time, those holding self-invested personal pensions (Sipps) will be able to invest in residential property - and many are already dreaming of a second home in the sun.

Record numbers of Sipps are being opened in anticipation, and the knock-on effect is likely to be higher house prices, not just in the UK, but in hotspots abroad.

An element of price correction may come in the UK with the advent of the "home information pack" (Hip) which must be provided by all sellers from April 2007.

Despite the acronym, few people think this is Hip, as the pack will cost "several hundred pounds to produce", said Melanie Bien of mortgage specialist Savills Private Finance.

The result is a predicted bulge in properties going on the market before the Hips come in, so sellers don't have to cough up more cash.

In the short term at least, more houses on the market means more choice for buyers than sellers, and should ease prices.

However, as the Hip becomes part of the selling process, homeowners will probably think twice about selling because they have to put their hand in their pocket before they do anything else. This would reduce supply, and so the cycle continues.

However, whether the house price pressure created by Sipps will be felt wholesale abroad remains to be seen. Buying a foreign bolt-hole with your pension may not be as easy as it appears. For example, French and Spanish law does not recognise trusts - which all pensions are - thanks to Napoleon. So someone would have to set up a company to buy the property, and the Sipp would have to buy shares in the company. The tax treatment is also likely to be onerous.

But if the lure of a home in the sun is strong enough, you can expect an acceleration in house prices on the Continent too, as Brits make the most of the new rules.

Share this post

Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 312 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%

  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.