With the release of the Chancellor’s Budget last month, new taxes on property raised concerns among UK investors. However, in an opinion piece for leading real estate magazine Property Week, Michael Wilkins, managing director of infrastructure finance at Standard and Poor’s, argues that the attractiveness of the UK’s private rental sector (PRS) is likely to grow in the long term nonetheless.
Building on S&P’s recent report, ‘Inside credit: ‘generation rent’ spurs institutional investment in the UK private rental sector’, Wilkins shows that despite the impact of increased stamp duty on property transactions, European institutional investors still regard UK PRS assets as the top preference among the various real-estate options – mainly thanks to the accelerated demand for rental accommodation in the country, particularly in urban areas such as London and Manchester. At the same time, the Budget’s other significant property-related tax, on capital gains for instance, could deter individuals and trusts, but is unlikely to have a major impact on investor appetite.
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