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First Sipps Now Its Reits To Hold Up The Market

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Some details on Real Estate Investment Trusts (REIT's) hidden in Yesterdays budget. The markets seemed to like it but will it really make a difference ?

REIT relief boosts property and helps FTSE to finish above 6,000

REIT relief boosts property and helps FTSE to finish above 6,000

SUSAN NELSON

LONDON'S key index closed above the 6,000 mark yesterday for the first time since March 2001 as the City digested Chancellor Gordon Brown's tenth Budget. Property shares made the most running as the Chancellor overhauled his proposals for Real Estate Investment Trusts (REITs) so that developers wishing to convert to REIT status would have to pay a charge of just 2 per cent of the market value of the properties concerned compared with some estimates as high as 20 per cent.

It added more than £1.5 billion to the value of the UK's four largest property firms as shares in Land Securities surged 13 per cent, or 237p, to 2,080p, British Lan gained 12 per cent, or 138p, to 1,300p, Hammerson rose 9.2 per cent, or 110p, to 1,300p , and Liberty International also ticked up 85p to 1,225p. Slough Estates rose 13.4 per cent, or 81p, to 685p.....

Edited by Riser

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They have had REITS in the US for years and it has not prevented their market from a crash. The economic cycle cannot be beaten by new investment products. IR are the nemesis and the way we pay for our "free" HPI lunch.

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Those big companies mentioned are all mainly holders and developers of commercial property.

BUT, will REITs decide to invest in residential and a big way. Will they be able to operate with economies of scale, and be able to make a tax-free profit from residential property at 5% yields?

http://money.guardian.co.uk/thebudget2004/...1171321,00.html

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I liked the comment on the BBC Budget coverage, as to why the American term 'Real Estate' was used in this context, when we obviously prefer the term 'Property' in the UK.

After all, who would invest in the PITS.....

TLM

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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