UPDATE: UK REITs To Become Law this Year

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LONDON-In news that has been broadly welcomed by the industry, the government will legislate for REITs this year by including new laws in the 2006 Finance Bill. In addition to the legislation, the government has set the conversion rate and doubled the borrowing thresholds.

“To attract more capital into house building, we will legislate to introduce for Britain real estate investment trusts that are so successful in the USA,” Chancellor Gordon Brown said. However, he cut the interest cover that will be allowed on the capital invested in a REIT to 1.25% and this is expected to affect the debt that can be used to fund them.