Last minute change of heart on SIPPs

Gordon Brown has abandoned plans to allow home buyers to receive hefty tax breaks on property invested in a pension, in a last minute U-turn.

In his pre-Budget report, the Chancellor announced that property would no longer be eligible for tax savings if put into a self invested personal pension. The change of heart follows high profile pressure from the housing sector to drop the plan, after concern it would exacerbate the shortage of affordable housing, particularly in rural areas.

Ministers had played down objections, but a campaign by the Rural Housing Trust and the tabling of an early day motion (Inside Housing, 2 December) did not go unnoticed.

Mike Jenn, a consultant at the Social Property Trust, welcomed the U-turn. 'Maybe he [the Chancellor] saw a rebellion coming. There were 15 signatures on one EDM and 27 on another,' he said.

But Alistair McIntosh, chief executive of Housing Quality Network, said the reversal meant the sector was less likely to trust the government's policy statements in the future.