The Property Investment Market launches SIPP product

Investors can now combine the tax advantages of a pension scheme with the growth potential and rental income from buy-to-let property via The Property Investment Market (TPIM), the world’s first property exchange.

The company, which provides an internet based exchange (tpimarket.com) allowing private investors to buy and sell shares in individual residential properties, has launched its SIPP Linked Account. This investment vehicle qualifies to be included in SIPPs because the ownership of the investment and the asset allocation of the portfolio are genuinely diverse.

TPIM’s first set of properties available to consumers to invest in a SIPP is a group of five flats from a 2006 Wimpey development in Caversham, near Reading. Investors purchasing a share of the group of properties, which is limited to just under 10 per cent per investor, get an equal share in each of the individual flats. The costs and returns are then aggregated across all five flats. Tax relief on pension investment has a dramatic effect on portfolio value. Someone depositing £7,800 gets basic rate tax relief of £2,200 paid into their SIPP by the government, bringing their total investment to £10,000. Higher rate taxpayers claim back a further £1,800 through their tax return, turning a £6,000 investment into £10,000.

Pointon York and Hornbuckle Mitchell, two of the UK’s leading providers of SIPPs, have both declared that the SIPP Linked Account from TPIM is an allowable investment within their products. They have been working with TPIM to integrate their systems and make the process of investing in residential property easy for their customers.

The SIPP vehicle will work in a very similar way to TPIM’s existing investment accounts, which allow shareholders to choose which properties they would like to invest in, by purchasing shares in groups of ’SIPP Ready’ properties through the exchange.

Stephen Kenny, Chief Executive of TPIM, said: “Our model for property investment really lends itself well to SIPPs, as it is possible to invest in a range of properties, achieving diversification within the asset class while spreading the risk. We want to give everyone the opportunity to invest in property and to reap its financial benefits. Investing in our SIPP Linked Account is now one of the easiest and most flexible ways to put residential property in a pension and get tax relief.”