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► What are PIFs?
PIFs (Property Investment Funds or Trusts) were the working name for a new type property investment vehicle coming to the UK based on the US REITs (Real Estate Investment Trusts) and was approved by the Chancellor in April 2006.
In the budget Gordon Brown also renamed them UK-REITs. Which is odd as we do not usually use the term Real Estate.
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► Why are PIFs problematic?
REITs are problematic, in that they need a balanced portfolio across the commercial, retail and residential sectors. Whilst there are currently significant holdings in commercial and retail, the privately rented, residential sector investment properties are mostly distributed through thousands of landlords holding 3 or fewer properties.
As the REIT managers seek to buy out the buy-to-let investor and develop their portfolios we will see a sustained rise in prices over the next 5 years further disadvantaging the first time buyer.
Remember REITs own the property and then they rent it to occupiers. It is the same model as Buy-to-Let with the same costs and the same risks and problems.
For more information please see our Joint Equity Briefing note on REITs
The Joint Equity Scheme is for first-time buyers, home owners and property investors. This site is developed and maintained by Joint Equity ltd. ©Joint Equity (2006)
Joint Equity Ltd works with Mortgage Beaters Ltd to provide case studies & Illustrations to prospective Owner-Partners & Investor-Partners. Joint Equity Ltd does not carry out any regulated activities and so is not regulated by the FSA (Financial Services Authority). Joint Equity Ltd are introducer appointed representatives of Mortgage Beaters Ltd, which are authorised and regulated by the Financial Services Authority.
The content of this website is accurate to the best of our knowledge and for information only. We do not provide financial advice.