Stockbroker Williams de Broe is offering shares in its first housing investment trust, which aims to be an alternative to buy-to-let schemes.
This split capital investment trusts aims to deliver capital growth and income by investing in properties in England, Scotland and Wales. The value of these properties will be limited to a maximum of £125,000 in London and £85,000 elsewhere.
The trust has two types of share – capital shares which aim to deliver growth of 12.6 per cent gross a year and income shares aiming to deliver 10 per cent gross a year.
It is a good time to invest in the rented property sector, because the demand is rising. This is because the decline in council housing and the rising costs of buying a home have left those on lower incomes looking for affordable alternatives.
Figures from the Council of mortgage lenders show the average price of a house in London was £175,000 in 2000.
This investment trust would suit investors looking for income, growth or a combination of the two. It could also suit those who are considering a buy to let investment, but who are put off by the responsibilities that go with being a landlord, such as collecting rents and carrying out repairs to properties.
However, with the costs of houses rising rapidly, it may be increasingly difficult to find suitable properties within the price range of this investment trust.