A new consultation paper on U.K. property funds, similar to the concept of U.S. real estate investment trusts (REITs), was released last week as part of the U.K. budget statement. However, many issues will need to be ironed out during the consultation period that closes on July 16 of this year.
"This has been a long-term thing; we've been looking at the possibility of developing this market since 1985," said one market source. "Establishing this vehicle paves the way for a new source of permanent capital for the real estate market, and the government hopes to establish a housing REIT that opens up investments in residential property to draw more investment capital into the residential sector. The idea is that it will help establish a more stable private rented sector."