The Property Industry Alliance’s (PIA) latest report has called on the Government to take action to encourage new Real Estate Investment Trusts (REITS) to emerge, to increase the likelihood of the development of a residential REIT sector and to allow unlisted REITs.

It believes that REITs would help the creation of a large, corporate rental sector which the industry thinks could contribute to easing the housing crisis.

The report from the PIA analysed the REITs’ market one year after they were introduced and set out possible changes. PIA is concerned that the market will stagnate unless the Government reduces the barriers preventing the creation of new REITs. Of the 18 REITs that currently exist, 16 are existing companies that converted to REITs and only two were created from scratch.

Gareth Lewis, director of finance and investment at the British Property Federation (BPF), a member of the PIA, said: “REITs could play a major role in the provision of high quality rented homes for those who can’t afford to buy their own and don’t qualify for social housing. This professional rented sector is very large in the USA and on the continent but is less of a dominant force in this country.

“However, to encourage more companies and institutional investors to invest in the professional rented sector, we think the Government should proactively look to lower the barriers to entry so that new REITs emerge that invest in homes as well as in offices, retail and industrial property.”