Despite disappointment amongst property investors at the governments delay in introducing tax-efficient real estate investment trusts (REIT), the private residential sector is set to grow with the potential introduction of half a million new units over the next five years.

Research by DTZ was published this week and shows that institutional and retail investors have in the region of £40 billion to invest in residential property. This would see stock within the private rental sector rise by 2% - from 2.2 to 2.7 million, according to the report.

Jacqui Daly, DTZs research analysts said: "Although the decision to delay the creation of a UK REIT is likely to have disappointed a number of investor groups, the weight of capital that DTZ estimates to be available for investing in residential assets, is of such magnitude that many key investors are likely to keep their powder dry in anticipation of the right residential product."