ASSOCIATION OF REAL ESTATE FUNDS COMMENTS ON CHANCELLOR’S AUTUMN STATEMENT
London, 22 November 2023:
The Chancellor’s plans to expand the investment opportunities available in ISAs to include Long-Term Asset Funds and open-ended property funds with extended notice periods are a positive step forward for the UK property industry and the millions of British savers and investors who support it.
AREF welcomes these new ISA rules which over time will help to bring diversity to the current products in the space, but this is only the first step to deliver an alternative offering to daily traded funds.
The main stumbling block remains platform development facilitating Long Term Asset Funds in the wealth and DC space. The FCA and BoE are aware of the issue and we look forward to further dialogue on this topic.
At the moment there remains no clear timeline for the delivery of this platform development and in the meantime daily traded open ended funds remain a key client solution to providing underlying investors with a differentiated income, capital returns and wider diversification benefits and continue to show their resilient in challenging market conditions in the equity and fixed income space.
Paul Richards is managing director of the Association of Real Estate Funds, a trade body representing funds with combined assets of more than £50bn, and he comments:
“We’re very happy the Chancellor is allowing open-ended property funds with extended notice periods to be included in ISAs.
“However, it was disappointing not to see a wider package of measures. In particular the bottlenecks presented by investment platforms to the UK’s large and rapidly growing defined contribution pension funds remain a live discussion. Unless the platforms move their position – or are encouraged or compelled to do so – we may see lower levels of investment from UK pension sources in those regions of the country which can benefit from growth-priming levelling-up investment.”
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