Can I include residential property into my SIPP?
Unfortunately you cannot include residential properties in your SIPP even if they are owned on a commercial basis i.e. Buy to Let.
What value should I note as the building sums insured?
Insurance documentation is confusing even more so with property sums insured. You will normally have two values listed on your policy
1. Declared Value – the actual rebuild value of the property NOT the market value.
2. Day One Value – This is the rebuild value of the property with an additional percentage to take into consideration inflation adjusted costs throughout the policy year, so if costs of rebuild increase then you don’t need to worry as insurers have inflated your cover automatically.
You should always get a RICS approved valuation to ensure you have the correct valuation.
Did you know you can obtain this from as little as £150 from a virtual RICS (https://www.rics.org/uk/) building surveyor?
Blending technology with traditional methods they are able to obtain accurate RICS valuation which is the only one insurers will approve.
This gives you a cost-effective way in which to obtain a true rebuild value of your policy then for peace of mind you can index link this to increase with inflation and review every 3 years to make sure it is in line with market movements.
What if I own Land?
If you have any land as part of your property or in isolation you will need to arrange land liability insurance to cover any liability arising from a member of the public injuring themselves on your land.
Can I borrow any money in my SIPP or SASS?
You can borrow up to 50% of the total value of your SIPP in order to fund purchases of property into your SIPP. There can be increased costs compared to traditional lending routes however it is a great way to free up cash in your SIPP.
What if I lose rent due to fire or flood?
If you have tenants forced to move out due to fire or flood then you can usually claim for any lost rent whilst your proper is being restored to normality.
The key is to make sure you have updated your rents sums insured. If you have a lot of properties you may need to just do a one off exercise then index link the rents to increase with inflation each year to take the pain out of calculating these, then review every 3 years to ensure they are not escalating beyond market conditions.
Should I see specialist SIPP Advice?
The best solution in our opinion is to have a team working for you who can advise both on your financial planning and insurance protection such as Financial Affairs who can deal with all aspects of your SIPP advice.