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House Prices To Rise By 15% From April 2006.....


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http://www.myfinances.co.uk/pensions/pensi...036;7831609.htm

(Sorry if this has been covered elsewhere but I'm new here and can't be bothered going through the archives)

Basically, changes to pension funds in 2006 mean many more are going to be able to invest in property giving an estimated 15% boost to the market, according to some. What does everyone think? In my opinion this is nonsense as there are already too many properties for rent. Why would anyone invest in more and have their properties empty for half the time? And if the market has started to go down by then (which it will have) then the whole property mania will be long gone. Anyone disagree? I've just sold my house (phew) and am waiting for the slump before buying again, but don't want to miss out on this one!

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http://www.myfinances.co.uk/pensions/pensi...036;7831609.htm

(Sorry if this has been covered elsewhere but I'm new here and can't be bothered going through the archives)

Basically, changes to pension funds in 2006 mean many more are going to be able to invest in property giving an estimated 15% boost to the market, according to some. What does everyone think? In my opinion this is nonsense as there are already too many properties for rent. Why would anyone invest in more and have their properties empty for half the time? And if the market has started to go down by then (which it will have) then the whole property mania will be long gone. Anyone disagree? I've just sold my house (phew)  and am waiting for the slump before buying again, but don't want to miss out on this one!

I suppose a simple answer would be to say that folks were able to put shares in such (SIPP) pension plans during 2000, 2001 and 2002 (as well as commercial property)...

(and you are right in thinking it has been done to death as a topic - search for SIPP)

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I suppose a simple answer would be to say that folks are currently able to put shares in such (SIPP) pension plans (as well as commercial property)...

there are currently about 85,000 SIPPs in the UK (i.e. the pension plans you will be able to invest property in) - the average value of pension plans is around £35k (i don't know the average for SIPPs but it may well be more) - you will be able to borrow 50% of the existing value of your SIPP to buy a property with, so, even if you have £50k in your SIPP you will only be able to borrow a further £25k towards a property leaving you with a grand sum of £75k with which to buy the property and that's assuming you want all your egss in one basket (or one property) - the only take up I can see is from those with a SIPP valued at £600k plus who might want 1 property as part of a balanced portfolio

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My interpretation of the article is that it will be for personal pensions (SIPPS) only. I do not think that the big fund managers will be getting in on the act and they probably would not want to.

As far as I know, you cannot actually borrow money within a pension, so I think it unlikely that many of us will afford to get on the pension property ladder. Only those with large SIPPs will be able to do it, which still is not a very large number. Also, you are forced to buy an annuity at 75 (very odd Brown legislation), which would mean the sale of the property.

The pension funds already charge a whacking great commission on the securities they own and it is really easy to value shares for an annual management fee, unlike property.

Any increase in property values seems very unlikely considering how small the potential number of investors.

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I agree with End is Nigh.

Even more of a point is (as has previously also been said a million times), the tax benefits might be really fantastic but, if the general feeling is at the time that the party is over and the margin between the tax benefits and the projected stagnated or lower prices are unexciting, the public won't bite.

As everyone says, the market for the past few years appears to have been driven by a sector of the public who have believed firmly that the prices will increase by 20% year on year. Anything less which will also involve a lock in of capital for a long time won't be to anyones liking (particularly the British public who are increasingly adverse to pension investment).

I personally am very excited about the SIPPS/property concept as I would like to be able to buy property in the future in the name of my kids at such time as the prices are right. This would build an investment/business for them which they couldn't tamper with for 50 years but should see them right by 2060. Ha! Ha!

This type of investing requires a lot of capital and a lot of commitment both of which the average punter does not have.

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there are currently about 85,000 SIPPs in the UK (i.e. the pension plans you will be able to invest property in) - the average value of pension plans is around £35k (i don't know the average for SIPPs but it may well be more) - you will be able to borrow 50% of the existing value of your SIPP to buy a property with, so, even if you have £50k in your SIPP you will only be able to borrow a further £25k towards a property leaving you with a grand sum of £75k with which to buy the property and that's assuming you want all your egss in one basket (or one property) - the only take up I can see is from those with a SIPP valued at £600k plus who might want 1 property as part of a balanced portfolio

(refering to red) and that figure is at retirement!!!

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I would like to be able to buy property in the future in the name of my kids at such time as the prices are right. This would build an investment/business for them which they couldn't tamper with for 50 years but should see them right by 2060.

Why not let them make their OWN investment provision/way in life?

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According to my financial bod the big change about the pension changes next year is effectively making one pension pot for people with their own pensions... so you would not have to worry about the differences between things like executive pensions and the like... and also be freerer to move money around into different funds, companies, etc.

I don't know enough about it msyelf yet and I gather that the financial bods are not that clued up on it yet... but some think this will become a prelude to ALL having the same flat single pension - even Public Sector bods - where you have to effectively manage and grow your own pension pot.

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My interpretation of the article is that it will be for personal pensions (SIPPS) only. I do not think that the big fund managers will be getting in on the act and they probably would not want to.

As far as I know, you cannot actually borrow money within a pension, so I think it unlikely that many of us will afford to get on the pension property ladder. Only those with large SIPPs will be able to do it, which still is not a very large number. Also, you are forced to buy an annuity at 75 (very odd Brown legislation), which would mean the sale of the property.

The pension funds already charge a whacking great commission on the securities they own and it is really easy to value shares for an annual management fee, unlike property.

Any increase in property values seems very unlikely considering how small the potential number of investors.

You do not need to interpret anything. The simple fact is that the proposal relates to allowing people who have SIPPs (Self Invested Personal Pensions) to include residential property in their pension. For years you have been able to include commercial property and a lot of people like solicitors and dentists have stuck the premises they work in into their pension plans so, when they retire and sell up, the increase in value in the premises they have worked in is sheltered from capital gains tax.

Writing "personal pensions (SIPPs)" is very misleading. A personal pension is one thing, a Self Invested Personal Pension is another. A person pension is provided and managed by one of the many thieving b@stard financial institutions who have no idea how to invest your money but are willing to charge millions for the privilege of doing it. With a SIPP you make the decision on where to invest the money. I don't know what the rules on putting Residential Property in will be, but with Commercial Property you can definitely borrow to buy the property within the terms and conditions of a SIPP.

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Why not let them make their OWN investment provision/way in life?

Good point - but since it will be their names, they will be able to play with it once they get to 18. If they don't like it they can change the asset balance. If they really don't like like it they can collapse the scheme and lose the tax benefits (at least they may learn a lesson in LIFETIME financial planning).

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there are currently about 85,000 SIPPs in the UK (i.e. the pension plans you will be able to invest property in) - the average value of pension plans is around £35k (i don't know the average for SIPPs but it may well be more) - you will be able to borrow 50% of the existing value of your SIPP to buy a property with, so, even if you have £50k in your SIPP you will only be able to borrow a further £25k towards a property leaving you with a grand sum of £75k with which to buy the property and that's assuming you want all your egss in one basket (or one property) - the only take up I can see is from those with a SIPP valued at £600k plus who might want 1 property as part of a balanced portfolio

What about the unknown in all of this ? If the average pension plan is worth currently £35k then I'd expect to find that a small but significant proportion of the population have plans worth well in excess of this and probably enough to buy property given the borrowing rules. How many people do we need to ramp up the lower section of the market again, 10% of the population would do it I'd guess.

Also there are a large number of people out there who have been using their full PEP/ISA allowances for over a decade now and some of that may find its way into the SIPP schemes; I know several people in this position.

I've listened to loads of reasoned arguments on HPC dismissing the SIPP rules and I have the distinct feeling that people are choosing to ignore the truck coming straight at them. Personally I am convinced that at best the SIPP rules will support the market this year and may very well give a surge over 2006/2007.

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  • 440 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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