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HM Treasury has issued the results of the informal consultation exercise announced by HMRC in the Budget in March which includes proposals to abolish the conversion charge for companies joining the REIT regime and relaxing listing requirements to allow listing on the Alternative Investment Market (AIM). Changes are to be introduced next summer in the Finance Act 2012 with advance release of legislation in December following the Autumn Statement.

An expert said: 

“Good news for the property industry – the Government has listened to its views about how changes to the REIT regime could open up the market and give a real boost to the stagnant UK housing market. 

“Abolishing entry charges for companies joining the REIT regime and allowing REITs to list on AIM should help pave the way for incubator REITs to enter the market. 

“The REIT brand is strong, and investors understand it. This is a great opportunity for the Government to attract new investment to expand the sector. 

“The measures proposed will make REITs more cost-effective to set up and easier to operate, which will create a more benign framework for residential lettings to meet the demands from “Generation Rent”. 

“We are waiting for the detail but the expectation is that these changes will open up the market to a wider group of institutional investors, including pension funds, hedge funds, UK charities and housing associations. 

“Now is the time for institutions, the property industry and house builders to work closely with the Government to ensure that an appropriate framework is constructed that can help get the UK housing market off the ground again.”

The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.

Published on our website on October 20, 2011