Lawson calculates that the loss of tax revenue as a result of investors holding buy-to-let properties in Sipps could be at least 4bn a year, equivalent to 1p in the pound on basic-rate tax. This loss of 4bn – the result of just 10 per cent of buy-to-let investors making this move – will be a big dent in Treasury revenues at a time when Chancellor Gordon Brown is gazing into a black hole in his finances. The likelihood is that all buy-to-let investors will consider such a move. The changes will have other unintended consequences. It looks as if investors will have to sell existing buy-to-let properties and transfer cash into their Sipps. But because the new regulations allow annual contributions to a pension scheme of 100 per cent of earnings or 215,000, whichever is less, investors with higher-value properties will be selling in the mid-range market but reinvesting in cheaper properties in direct competition with first-time buyers. This could artificially depress the price of properties in the 250,000-plus market and cause a surge in prices at the cheaper end of the scale. The number of first-time buyers – at around 30 per cent of all borrowers – is already well below its long-term average of 50 per cent. Increased competition for lower-priced properties will push up prices and make homeownership even more difficult to achieve for these buyers. As Lawson points out, it could take less than two years for investors to build up enough money in their Sipp to invest in a buy-to-let property. Many will also take the opportunity to borrow the maximum 50 per cent of the fund to finance a big expansion in their portfolios. For the professional investor with large numbers of buy-to-let properties, transferring them into a Sipp is not feasible since they will very soon come up against the lifetime limit of 1.5m. Nobody knows precisely how many investors have put their money into buy-to-let properties since 1988. The most recent figures from the Council of Mortgage Lenders show that, at the end of June 2004, there were 473,000 buy-to-let mortgages outstanding, worth 46.8bn. But if the buy-to-let market mirrors the owner-occupier market, only 60 per cent of properties will be mortgaged and the other 40 per cent will be owned outright. This brings the possible number of investment properties up to around 800,000 although this is probably an underestimate. Figures from the Association of Residential Letting Agents show that more than a third of buy-to-let landlords own only one investment property and 20.2 per cent have two. In other words, over half of all buy-to-let investors are amateurs. These are the people who will sell to reinvest within their Sipps. There could easily be some 500,000 of them making the switch. Even the 26.8 per cent of buy-to-let investors who have three to five properties could consider making the switch without necessarily coming up against the 1.5m lifetime limit. There is no doubt that even big landlords will take the opportunity to shield the maximum possible in a Sipp, even if it is a tiny part of their investment portfolio. Arla’s figures show there are some serious investors, with 13.2 per cent of those surveyed having six to 10 properties Only 4.8 per cent own 11 to 20 properties and 1.3 per cent have over 50. Of course, there is nothing to prevent the Chancellor from changing the rules by April 2006. It has been rumoured for some time that capital gains tax is being reviewed, in particular the concession that allows investors to become non-resident and sell their properties while abroad free from CGT, provided they stay non-resident for five full tax years.