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Property freedom for Sipps could transform UK economy, says Ritchie

Allowing Sipps to invest in residential property could be as significant a policy move as Margaret Thatcher&#39s decision to sell council properties to tenants in the 1980s, says pension guru Stewart Ritchie.

Speaking at Money Marketing Live in Manchester this week, Scottish Equitable director of pensions development Stewart Ritchie said if rumours that the Inland Revenue is intending to bring residential property within Sipp investment were true, there would be huge implications for the UK economy.

Ritchie&#39s comments come in response to press and industry speculation that the Revenue pensions simplification team are considering investment in housing. Heavy regulation, requiring an arm&#39s-length relationship between property owner and tenant, would have little impact but free investment rules could change the UK economy fundamentally, he said.

Ritchie said: “If the Government were to allow bringing residential property into Sipps on an unregulated basis, it could be a move on the same scale as Thatcher&#39s decision in the 1980s to allow people to buy their council houses. If the bottom line were that such a move turned out to be an incentive for people to get a pension, it could be very positive.”

Hornbuckle Mitchell Trustees managing director Mark Stubbs says: “If they did free up residential property, there would be a mass purchase and a danger that the housing market could overheat. It would be bad for first-time buyers and inflation so I think that the Chancellor will be against it.”

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