Labour have tried to allay fears that the proposed relaxation of pensions fund investment so that they can invest in private residential property will not effect the housing market as the rules restrict the pension fund to how much it can borrow on a mortgage.
Our view
When the new simplification rules come into force the biggest investment juggernaut in the UK will be unleashed on the property market and that is billions and billions of pension pounds. Who is kidding who here? Of course it will have impact. Why do you think they have allowed this relaxation of the rules? Labour need money investors from somewhere to build property - we just think they have called it wrongly and perhaps should be setting harsher rules on where or what type of property can be bought. So what if there is an income tax charge as it will a benefit in kind if you then live in the property that you own? It will still be the richer who use pensions as a viable tax saver to acquire more wealth and residential property is another bonus. The poorer still trying to get on the property ladder will still be trying to get on the property ladder.