Relendex calls for housing white paper to unwrap SIPPS for residential property
THE FOUNDER of peer-to-peer property platform Relendex is urging the government to boost funding into the housing sector by allowing residential property to be included in pension investments.
Speaking to Peer-to-Peer Finance News ahead of the government’s long-awaited housing white paper, Michael Lynn called for a liberalisation of the rules that currently permit only commercial property in self-invested personal pensions (SIPPS).
“Most of the pension providers who look after SIPPs are so terrified of the HMRC rules that all residential lending or investment is not allowed,” he said.
“That could be an amazing source of cheaper capital yet it is completely closed off. There is also an issue that IFAs run off at the prospect on advising investment in P2P.”
He also backed policies rumoured to be included such as minimum tenancies which he said would provide certainty for tenants and landlords.
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The government is expected to set out a strategy on Tuesday 7 February 2017 to boost housebuilding, which is predicted to include a greater focus on the build to rent sector.
This may well help P2P property lenders in the buy-to-let and residential development space, John Goodall, chief executive of Landbay said.
“Despite the aspirations of millions, home ownership levels continue to dwindle regardless of resolute ambitions made by governments past and present, meaning more people now than ever lean heavily on the private rented sector,” he said.
“A sensible policy discussion is long overdue, so it’s encouraging news that we may finally see some support for what is an increasingly important part of the housing mix.
“There are currently 4.3 million tenants in the rented sector and the fact remains that those hoping to one day purchase a home of their own are relying on a well-served buy to let market to ensure that excessive rental growth doesn’t dampen their purchasing power.”
Goodall added that it was important to build the right type of homes. “Simply building more homes is not enough, but building more homes specifically designed to rent rather than buy should go some way to increasing the number of people able to get a foot on the housing ladder down the line,” he said.
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Stuart Law, chief executive of Assetz Capital, said the paper should focus on lessening planning regulations, encouraging the manufacturing of off-site housebuilding and support smaller housebuilding firms.
“The white paper should continue to facilitate significant change for housing planning permissions in sensible locations, such as brownfield and other small land-locked sites, he said.
“There also should be a reduction in planning powers, making it far more difficult for planners to delay planning and also for local councils and individuals to object to sensible smaller planning developments. Objections will need to be reduced, as new housing is a critical requirement in our country, irrespective of any reduction in immigration going forwards.”
P2P lenders have also echoed other suggestions to boost the housing market such as freeing up green belt land on the fringes and supporting local councils.
“There are a number of steps we would like to see the government take to give a helping hand to developers and get spades in the ground for new houses,” Liam Brooke, managing director of and Saving Stream said.
“Making sure that all land is registered with the Land Registry would be a great way to increase the supply of land on the market. About 20 per cent of the land in England & Wales isn’t registered, making it very difficult to find out who owns it. That is a major barrier to purchases of land for housing.”
He also suggested a broader review of Section 106 agreements would also be welcome, “That’s the money developers pay to local authorities in exchange for planning permission. The system is pretty murky and smaller developers simply don’t have the leverage in negotiation that bigger developers do,” Brooke added.
“But there are plenty of more radical solutions that could be considered, such as incentives for older people to downsize and get their properties back on the market, or paying the legal costs of developers who are unreasonably forced to appeal to get planning permission.”
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