London residential REIT

Landlords looking to join the London residential juggernaut but do not have the hundred or so grand to put down as a deposit on for a small 2 bed flat in a mediocre area might want to take a look at a forthcoming IPO being prepared by Ludlowthompson a London based estate agent.  Possibly my biggest investment regret was not to buy a property back in 2004 when the differential between London and the rest of the UK was at it's lowest in recent history.

House prices in London according to the ONS have now risen by more than 12% in the last year. 

What are the attractions?
A REIT is required to pay out 90% of it's free cash-flow in dividends and is a tax efficient vehicle for investors paying no corporation or capital gains tax.  This new REIT is aiming to pay an annual dividend yield of 4.5%.  This equates to a gross rental yield on a buy to let investment of 6%, considerably above the level currently achievable in many areas of central London.

If you do believe that the London residential property market has further to go but don't want to bet your house on it then an investment in this REIT could be the way to go.

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