Landlords to discuss REITS conversion

Housing associations are to investigate becoming real estate investment trusts, after the pre-Budget report gave the tax efficient vehicles the green light.

The report announced long-awaited draft legislation on REITS would be brought forward for inclusion in next year's Finance Bill. Genesis Housing Group, Peabody Trust, A2 Housing Group and Swan Housing Group are among a consortium of 14 housing associations that will meet in January to discuss banding together to form a REIT.

This could grant them tax breaks, and enable them to drive down rents and increase tenant choice.

'I hope it is feasible,' said Derek Joseph, director of Tribal Treasury Services, which is jointly co-ordinating the group. 'Because of the tax breaks what it might do is provide more affordable rents to lower income groups.'

Liz Peace, chief executive of the British Property Federation, said the social sector should be encouraged to convert to REITS. 'The issue should be addressed imaginatively. REITS could boost the property market and there would be a trickle down effect to affordable housing,' she told Inside Housing.

Further details of the proposals for REITS are expected to be published before the end of the year.