The investment property market may be increasingly open to those who are capable of producing a large deposit in order to purchase a building.
Individuals with a high level of wealth have been advised to consider investing in commercial property, as part of a self-invested personal pension (SIPP). Alliance Trust Savings (ATS) has suggested that those looking to their futures and putting money away, may be wise to put their money into commercial property. Indeed, the organisation noted that this could be one way to maximise potential returns.
Steve Latto, head of pensions at ATS, said purchasing commercial property can be complicated, so taking expert advice is never a bad option. ‘With the SIPP purchasing the commercial property, the owner of the business can receive a significant capital injection which they can use to make further contributions to their SIPP,’ he stated. Mr Latto went on to predict that this route will become a popular one in the months to come.
With current economic conditions making it difficult to borrow capital for commercial property projects, those with the deposit required to buy investment property may find conditions are favourable to them as they have the ability to take advantage of falling prices.
Dominik Lipnicki, a director at Your Mortgage Decisions, stated: ‘The government has failed to get the banks’ lending and many areas in the UK are suffering a property price downward spiral, making the short to medium-term look rather bleak.’
Some experts predict that the price of commercial property in central London is set to return to the pre-recession levels experienced in 2008 by the end of the year. Following this forecast of a return to the boom times for the commercial property market, it is believed that other regional cities, such as Manchester, could follow the trend in 12 to 18 months time. Increasing uptake of commercial property in London is hopefully, an indication of a positive nationwide commercial property market.
This will no doubt, be very interesting news for those looking to invest in their own commercial property pension.
