The new pension rules to be introduced in 2006 will allow residential property to be held in SIPPs, meaning landlords can transfer properties into their pension plans.
However, although there is interest in the SIPPs scheme, Mortgage Trust’s survey results found only 29.2 per cent of landlords felt up-to-speed with the Treasury’s plans while 25 per cent had heard nothing of the changes.
Nicola Severn marketing manager at Mortgage Trust, said: “Investors are eager for the Treasury to produce the details in order to plan properly. Despite a level of awareness that SIPPs are coming, landlords are not yet in a position to fully consider the advantages.”
Although landlords admitted a level of confusion over the changes to take place, 70 per cent of those interviewed were considering putting at least one property into a self-invested pension.
Over half of these expected to hold between two to five properties in a SIPP with a further 16 per cent wishing to hold more than five properties in the scheme.
Although SIPPs could be key for investors in the buy-to-let market, James Cotton, mortgage specialist at London & Country, fired a warning shot over their impact.
“With ‘A-Day’ approaching (April 2006) I expect more and more investors to become aware of SIPPs between now and then, and a lot of providers will be pushing their products into 2006.
“However, now that more and more people are thinking of property as an investment it must be realised that if the landlord does change to a SIPP system, the house will no longer be owned by them, but by their pension fund trustees. Therefore any major changes or alterations to the property must be authorised.”
