From: "Crowley"
Newsgroups: uk.politics.misc uk.finance
Subject: Re: SIPPS shock as Brown shelves tax loophole for residential property.
Date: 6 Dec 2005 06:27:01 -0800
posting-account=yGNAvw0AAABsgRsckUU2yFAQy4yH8Lsf
Tumbleweed wrote:
> "Crowley" wrote in message
> news:1133863486.784703.138960@g47g2000cwa.googlegroups.com...
> I dont have any sympathy even though it looks like they were conned by
> Brown. And as SIPPS were one of the few things propping up the house
> market I expect to see accelerating price falls over the next year.....
>
>
> ----------------------
>
> wasnt it you who posted a long analysis recently about how SIPPs *werent*
> going to be propping up house prices?
Fair comment. I expected that and maybe I did underestimate the
likely impact of SIPPS on 'sentiment'.
The amount to be pumped into property through SIPPS was estimated at
around =A310billion pa which is a small fraction of the total amount
involved in house sales. However the impact of SIPPS on buyer/seller
sentiment seems to have been significant in retaining *some* confidence
in the market with frequent talk of a 'wall of money' about to hit the
property market next April.
Brown has put the kybosh on that now amid much weeping and wailing from
ea's, IFA's etc and it seems likely to me that this will have a
negative effect on sentiment aswell as depriving the housing market of
an injection of several billion pounds pa........
http://www.guardian.co.uk/guardianpolitics/story/0,3605,1659327,00.html
"A =A33bn property tax giveaway that has sparked frenzied investment in
buy-to-let and holiday homes was yesterday halted in its tracks after
an 11th-hour ban by the chancellor.
The controversial tax break, which would, from April next year, have
allowed the well-off to put their properties into a Self-Invested
Personal Pension (Sipp) effectively tax-free, was yesterday closed
after the government said it was being abused by the tax-avoidance
industry.
The U-turn stunned financial advisers and property developers. The
Royal Institution of Chartered Surveyors had estimated that 50,000
properties, worth around =A324bn, would be switched into Sipps over the
next few years. At the last Property Investor Show in London scores of
exhibitors were promoting buy-to-let Sipp schemes promising "40% off"
the cost of property, while Abbey, which owns the UK's largest Sipp
provider, called it "the hottest topic of conversation at middle-class
dinner parties".
http://news.ft.com/cms/s/a93e02e8-65d7-11da-8f40-0000779e2340.html
"Financial advisers and Sipp providers have reported that growing
numbers of investors have set up Sipps or paid deposits on flats in
property developments with the aim of completing the transaction after
the rule changes in April.
Richard Meek, principal of Punter Southall, financial advisers, said:
"To leave it this late before introducing legislation - after
explaining on a number of occasions how it was going to work - is
extraordinary. Most people were led to think this was definitely going
to happen. Many people will have started to make financial plans and
will have incurred costs setting up a Sipp for no reason."
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POSSIBLE FIRST SIGNS OF LIKELY CONSEQUENCE OF BROWNS DECISION TO
EXCLUDE RES. PROPERTY FROM SIPPS ?................credit crunch on the
way ????.................
"The Mortgage Works has announced it will cease to accept applications
for buy-to-let (BTL) mortgages on newly-built properties.
The lender will only accept buy-to-let applications on properties aged
over one year from now on.
All current applications in the pipeline will be honoured. The change
only affects new buy-to-let mortgage applications.
Commenting on the decision, Matthew Wyles, group development director,
said: "Owing to the current over-supply of newly built property,
valuation in this sector is more of an art than a science. Some
developers are now prepared to do deals on price outside of the formal
contract. In these cases the lender may be unaware of the actual price
being paid and ends up relying on a valuation which may in turn be
based on erroneous assumptions. We will go back into new build
buy-to-let when we believe that the market forces of supply and demand
have reached equilibrium."
This announcement relates exclusively to buy-to-let."
http://www.mfgonline.co.uk/news/newsarticles.asp?unqueid=3D15526
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