However, some experts remain sceptical and believe the potential effect of allowing residential properties to be held in SIPPs has been exaggerated.
The majority of intermediaries surveyed predicted the change in pensions rules would lead to an average uplift in BTL business volumes of 10.6 per cent with 70.6 per cent planning to advise on BTL mortgages for SIPPs when they come into effect. Almost half, 47 per cent, intend to team up with a pensions adviser.
Martin O’Reilly of Prosperity Wealth Management said that the BTL market would continue to grow: “The SIPP changes will serve to increase demand further and thus drive up market values.”
However, Andy Frankish, managing director of Mortgage Talk, believed there is still a lack of knowledge in the industry about SIPPs. “Placing rental property in a pension scheme will only appeal to a limited number of people, namely those who have considerable pension funds at present,” he said.
August’s Base Rate cut contributed to the number of intermediaries predicting more business over the next three months rising to 11.8 per cent from 5.7 per cent in July.
The number of those predicting a fall has dropped while those expecting a stable pattern rose to 37.3 per cent from 34 per cent. A significant minority believe rates will fall further while the belief that rates are unlikely to rise has bolstered broker confidence in the market.
Nicola Severn, marketing manager of Mortgage Trust, commented: “The forecast offers an insight into intermediaries’ views on pension reforms and reveals that although there is a need for greater clarification around the rules, the ability to place residential property in a SIPP will undoubtedly provide a boost to the BTL industry.”
