Social housing investment vehicle consultation launched
Author: Ben Cook, Planning Magazine |
A consultation on whether a tax efficient vehicle for property investment – widely used in the commercial property market – could be used to encourage more investment in the social housing sector has been published by the government.
The Department for Communities and Local Government (DCLG) wants to use the consultation to explore whether more social housing could be built with funding from real estate investment trusts (REITS), which do not have to pay tax as the tax liability is passed on to the investor in the REIT.
According to the consultation paper, more than three-quarters of the UK’s major listed property companies have stakes in the UK REITS, of which there are around 20.
The focus of investment for existing UK REITs has been in commercial property, with only a few holding some residential property in their portfolio.
The DCLG consultation seeks views on how REITS could be used to increase the amount of social housing built ? it says this is particularly timely because the current Finance Bill includes a “series of measures to support entry to and investment in REITS”.Housing minister Grant Shapps said: “I am determined that we do all we can to get Britain building, and these reforms will help build more affordable homes, boost investment in housing and increase choice for tenants”.
“That’s why we’re launching today’s consultation, to see how we can best break down the barriers that prevents private investment in social housing – with the turnover from housing associations now at over 12 billion this should be seen as a sound and stable investment to those looking for a long-term return.”
To read the consultation document, click here.