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12 February 2015
In its review of 2014 property and land investment in SIPP and SSAS Xafinity, having analysed over 100 recent commercial property transactions, has seen a significant increase in SIPPs and SSASs purchasing land.
Whilst industrial units are the top investment, and retail units second, these are more standard fare.
The findings show that around 20% of SIPP and SSAS clients are purchasing land as an investment opportunity, often with a view to future development. Furthermore, the purchases include land for commercial and residential developments as well as agricultural land. In many cases, the clients own adjoining land, or already own the land to be developed, and are placing it in their SIPPs and SSASs.
Conscious of the potential for ‘landbanking’ scams, Xafinity asks advisers to be vigilant when advising on SIPP and SSAS investments where the investor is looking to purchase land, and has clear procedures in place to help advisers and clients identify any potential scam schemes.
Jeff Steedman, head of SIPP/SSAS business development, comments: “Historically, much of the SIPP and SSAS investment in property has been for synergistic management of a pension alongside a business. The advantages of holding a business property within a pension are numerous and well understood, albeit the potential for this market remains huge. However, 2014 saw a significant shift in people using their SIPP / SSAS as an entrepreneurial investment vehicle to purchase land for either commercial or residential development.
Not all SIPP/SSAS providers allow land investment and some have withdrawn from the SIPP borrowing markets, but Xafinity remains committed to allowing our clients as much flexibility as possible, especially when it comes to investments in property and land.
While in the greater scheme of things the numbers are small they are significant as they show that private investors are returning to a market that has largely been out of favour since 2007.”
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