Buy to Let Mortgages - 27.09.05

UK Mortgage News

You may be able to double your returns

Caution is being expressed by some financial advisors regarding the fact that landlords will be allowed to put rental property in their pensions. This means they could double their returns if they add them to their pension funds. The pensions are the Self Invested Pension Funds or SIPP's, which give holders more freedom to choose ths funds in which their retirement savings are invested.

From next April people will be able to hold in their funds a wider range of investments which could include residential housing. Most pension companies are said to be happy to allow customers to invest in rental property and the money which is to be used to fund the property purchase can be put in to the SIPP where it will be given tax relief. For every £1 put in the SIPP the Government adds 28p, higher rate taxpayers can receive further relief through their tax returns. Up to 50% of the total value of the SIPP can be borrowed from a mortgage lender to fund the property purchase. The rental income from the property would also be free of income tax and any profit from the eventual sale will not be liable for capital gains tax.

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Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

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Cheap Mortgages is a trading name of Grovelawn Limited, which is authorised and regulated by the Financial Services Authority.
Grovelawn Limited is Registered in England & Wales number 5030300. Registered Address: 98 Station Road, Sidcup, Kent, DA15 7BY.
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The Financial Services Authority (FSA) do not regulate some types of buy to let, commercial, overseas mortgages, tax advice and credit or loans not secured on property.