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PIFs could bring stability to the commercial and rental markets

Kevin Paterson, managing director, Park Row Independent Mortgages The UK is the only member of the G7 that does not have some sort of property-based investment trust and it looks like the chancellor has finally woken up to the benefits of this form of investment vehicle. An increasing number of small investors have sought to diversify their portfolios by investing in property, usually in the form of buy-to-let.

Investor diversification has been creeping up on us over the past few years with the continuing bear market meaning many small investors have been getting sick of seeing their pension funds heading south. Alongside this is the chancellor&#39s determination to curb volatility in the UK housing market. The supposed panacea that is long-term fixed rates seems to have lost profile following Professor David Miles&#39 &#39state the obvious&#39 report into the subject.

However, one way that market volatility be reduced is by improving the rental stock available to help meet housing demand. Allowing trusts to invest in all forms of property will give smaller investors the opportunity to broaden their portfolios without the risk of having to purchase property themselves. The new funds will allow investors to buy into property using their ISAs, pensions or unit trusts – a format which has traditionally been the bastion of the commercial property fund. The funds are likely to contain a mixture of property types but we may end up following the US example and see the emergence of specialist investment funds in properties such as hospitals, prisons, hotels and so on.

This could help maintain stability in the commercial property and residential rental markets. It would also be a good alternative for amateur landlords in the buy-to-let sector, thus helping to stabilise risk that market in the long-term.


The Exchange appoints managing director

The Exchange has appointed David Child as managing director with effect from May 1. The appointment is part of an internal reorganisation of parent company Marlborough Stirling which will provide greater clarity of responsibility for operational and financial performance of its individual business units. The internal organisation of Marlborough Stirling is to be realigned as […]

One in four people set to have mortgage at retirement, says Prudential

One in four, or 12.5 million, people in the UK are set to have a mortgage at retirement, research from Prudential reveals. The research also shows that just over four in 10 first-time buyers are over the age of 35 and that over 10 million people over 35 have started a new mortgage term. Prudential […]

Mortgage Talk gives its top mortgage deals for the week

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GMAC-RFC unveils non-conforming range

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Champion the small-scale developer

Traditional development finance must price in project and liquidity risk, but if your project is completed and you have begun selling units you could be eligible for cheaper funding, writes Matthew Tooth of Lendinvest. A product which prices purely for liquidity risk is one way to help developers lower their costs. This type of product allows […]


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