With property available to be included within a pension plan, a number of lenders are now hastily considering the opportunities and borrowing revenue that the SIPPs market could bring.
Although the pension fund owns the property, rather than the individual, John Heron, managing director of Paragon Mortgages, said he expects the buy-to-let sector to develop further in time for the changes to SIPPs on 6 April 2006. Heron confirmed that Paragon had already begun ‘rolling out’ its SIPPs service in preparation for next year and had began planning for them as soon as they were revealed two years ago.
Heron said: “We have been working on our SIPPs service since they were revealed. We realised the demand from our existing customers and through enquiries from new customers early on and responding to this we recently began rolling out our buy-to-let SIPPs service.”
He went on to add: “We were the first to announce our SIPP commitments and we expect to start approaching transactions very soon after Christmas as demand from customers builds up to April’s SIPP changes.”
Kevin Morgan, managing director at Consilium Financial Planning, agreed that SIPPs could motivate customers to enter the buy-to-let sector. He said: “The interest that has already been expressed in SIPPs is high and it can only be a good thing if there is an interest in the area of pensions.
Previously the whole area was a bit of a black hole so it’s good to see something positive about it.”
