The government’s failure to address mortgage real estate investment trusts in the Budget has been branded a “missed opportunity”.
The sector had widely expected chancellor George Osborne to announce consultation on the REITs regime in order to allow the introduction of the vehicles, which would take on existing bank loans.
Mortgage REITs, which are well established in the US, would free up bank lending capacity and potentially provide new sources of capital to the deprived mortgage market.
Deloitte partner and REIT specialist, Phil Nicklin, said: “Although the omission of mortgage REITs in the Budget was a missed opportunity this time around, it is still under consideration by the government.”
He added that the industry will continue to make representations to the Treasury to ensure there is a “compelling reason” to consider a change in the future.
The government has pledged to consult on the role REITs can play in supporting investment in the social housing sector, and whether to allow REITs to create and own specialist trusts, for example a residential vehicle for sector-specific investors.
bridget.o’connell@estatesgazette.com
