Using a private pension to buy property

philipc_2

Hi, I've never used this forum so apologies if this area has been covered in the past!

I've heard quite a bit lately about people buying property from pension funds but I'm unsure whether this relates purely to business policies or whether it can be done using private pensions. I have two private pensions that don't total a great deal but would cover a 15% deposit on a small / medium property. The buy to let market in our area looks very promising at the moment and I thought this may be a better way to invest this money with an additional mortgage to supplement the remaining 85%????

If this is possible (any help would be very much appreciated!!) would there be any benefits to setting this up as a business rather than as an individual?

Many thanks!

GreenB_2

BTL isn't as good now as it was a couple of years ago..... be prepared for lots of negative comments by some of the board contributers (especially those that are FTB's) who are blaming this sort of thing for high prices.

I think changes to using houses for pensions is coming in 2006..... somebodyelse on here will tell you more!

philipc_2

Thanks for that!

ManAtHome

I think the current/proposed rules are that you can only borrow 50% of your fund value to buy residential property (ie with a £100k fund, you can purchase up to £150k). My opinion is that this is wonderful news for the rich or people who can bung their entire salaries into their pension and live off their perks (MPs etc....), but won't really be an option for the majority.

If you don't buy outright, you then have a future committment to continue funding your pension unless rental income pays for the loan and management. Needs quite a bit of thought I think....