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Property in Sipps set for 10bn boost

The Sipp property purchase market could be worth 10bn after A-day and provide a 5 per cent boost to the housing market, according to new research from Hargreaves Lansdown.

The research, which surveyed 614 members of the public and 180 Hargreaves Landsown Sipp investors, shows that 37 per cent of the current 140,000 Sipp investors in the UK are interested in using their Sipp for property purchase once the new simplified pension regime takes effect next April.

With the average anticip-ated value of a Sipp property purchase standing at 195,000, this would equate to a 10bn demand for property and a 5 per cent boost for the UK housing market.

Eighty-five per cent of Sipp investors will buy property in the UK, according to the research, with 79 per cent of Sipp property investors planning to invest in a buy-to-let property and 42 per cent in a holiday home. Just 14 per cent are planning to put their main residence in their Sipp.

Spain and France are the most popular targets for the 35 per cent of investors looking to invest in overseas property followed by a surprisingly diverse selection of countries, including Dubai and Israel.

Of those planning to buy a property, 47 per cent are planning to increase their pension contributions specifically to buy their property and 75 per cent plan to borrow within their Sipp to finance their property purchase.

Hargreaves Lansdown head of research Tom McPhail says: “These results confirm the public’s irrational love affair with property. The range of countries in which people plan to buy property is surprising and indicate that people are not bothered by the risks involved.”

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