Double anger after Sipps U-turn

By JANE PADGHAM
Updated: 08:06 EST, 6 December 2005

A SPECTACULAR U-turn by Gordon Brown on Self-Invested Personal Pensions has infuriated both the property industry, which was looking forward to a much-needed boost for the buy-to-let sector, and the accountancy profession, which had spent months preparing for the changes.

In his Pre-Budget Report, the Chancellor ditched widely trailed plans to allow people to use their pension pots to invest in residential property and other assets such as classic cars, art and fine wine - and receive generous tax breaks.

'This has wasted thousands of hours of professional time,' said Jerome Melcer, actuarial director at accountants BDO Stoy Hayward. 'An entire industry has been set up to deal with property-based Sipps and now it's all been canned.'

Jim Ward, director of Savills Residential Research, said the plans would have kick-started the moribund buy-to-let market. 'However, people may still be able to invest in residential property through Real Estate Investment Trusts,' he added.

Brown's U-turn follows criticism from unions and some charities who argued that the new Sipps rules could push up house prices.

Ryan Emmett, economist at The Royal Institution of Chartered Surveyors, said: 'The Government appears to have taken the view that the main beneficiaries would have been those looking to buy a nice flat by the sea at a discount.'

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