From next April UK investors will be able to buy residential property as part of their self-invested personal pensions (SIPPs). Until then it has only been possible to do this for commercial property, but from April 2006, investors using SIPPs will be entitled to full tax relief on the purchase price. If they buy to let, as many are expected to, rental income from them will accumulate tax-free in the pension fund, and there will be no capital gains tax when the property is sold. These are substantial benefits added to home-buying.

In the FT [subscription] Rebecca Knight reports on a survey by Sippdeal Limited, which finds that 64% of SIPP holders said it was "definite or likely" that they would buy property using their pension. This consisted of 56% who would buy to let, 29% for a holiday home, and 15% for their principal residence.

Given that SIPP investors control assets worthy about £35bn, according to Martin Cadman, ex-chairman of the Sipp Provider Group, there could be a huge influx of money into the house market next spring. House prices, which have been flat, could begin to drive upward again. This, in turn, might well lead people to feel themselves richer, and free to borrow more against the increased equity in their homes. And that, in its turn, could boost the high street spending which has recently flagged.

It illustrates how easily manipulation of the housing market can bring about wider economic consequences, some intended, some not. Those alarmed by the degree to which UK economic performance depends on record levels of personal debt might have to steel themselves for still loftier heights. And those who predict that it must crash down at some stage will find themselves staring into an even deeper chasm.

Pension savings could increase substantially, albeit in possibly vulnerable property; though first-time buyers who have struggled to enter the property market could find the bottom rung yanked further beyond their reach. I suppose there must even now be people in the Treasury wondering to what degree, and for how long, this generated boom will conceal the bad news coming elsewhere in the economy.