Agents and landlords have joined the outcry over the Chancellor's decision not to allow houses and flats to be bought outright to add to the new self-directed pensions.

National Association of Estate Agents chief executive Peter Bolton King said the association "was stunned by the about turn on SIPPs".

He added: "While we are pleased to see that residential property will be allowed into Real Estate Investment Trusts, we are disappointed that all the time and money spent on preparing and discussing the implications of SIPPs has been wasted."

Mike Stimpson, chairman of the National Federation of Residential Landlords, saw the decision announced by Gordon Brown in his pre-budget speech as a further indication that the Chancellor has little interest in the contribution private landlords make to boosting the supply of homes to let. "They are not regarded as businesses for taxation purposes," said Mr Stimpson. "Landlords are now not able to use their investment properites to build a tax-free pension fund."