The prediction, made by the managing director of the Paragon group, John Heron, would provide a boost to the housing market and could provide an extra income stream for brokers.
However intermediaries who are only authorised to provide mortgage advice or operate only within the commercial and buy-to-let arena will have to forge alliances with specialist pensions advisers to take advantage of the forthcoming rules.
David Baker, director at SIPPs specialist James Hay, said brokers who were looking to cash in on the rule changes had already approached his firm.
He said: “Because our clients can currently only invest in commercial property most of them source their own borrowing. But when residential properties make it into SIPPs it could pay to have a broker who has a wide knowledge of the products available.”
Heron said: “The ideal scenario would be a firm or firms who could combine both pensions and mortgage advice.” However, he warned that a small number of lenders would offer mortgages on a SIPPs property because of the different lending criteria.
Clients will only be able to borrow up to 50 per cent of the value of their SIPPs when investing in a residential property.
Kevin Paterson, director of the Park Row Group, commented: “I certainly don’t think the inclusion of residential property into SIPPs will do the buy-to-let market any harm but I don’t think that it will send it sky high either.”
