The potential rates of return for investing in this sector look attractive but some practical issues remain unresolved and restrictions and limitations on HITs may limit their success. A study by Yolande Barnes of Savills Residential Research Department found:
- The creation of HITs will be inhibited by:
- the need to have a value of at least £50m in order to be traded on the Stock Exchange;
- the inability to buy BES companies or properties let on assured tenancies, coupled with the difficulty of building sufficient properties to order;
- Government proposals to exclude properties worth more than £85,000 (£125,000 in London).
- Whilst the HITs legislation is a welcome first step towards a mature residential property investment sector, the author recommends further work to improve/simplify taxation and other policies, perhaps in conjunction with similar measures in the commercial property sector.