🏠 Is there an alterNative to investing in property...without all the hassle?
It’s no secret being a landlord in the UK has become a lot harder.
⚠️ What’s changed for landlords
Being a landlord hasn’t just got harder
It’s being reshaped
1. Section 24 (phased in 2017 to 2020)
Mortgage interest is no longer fully deductible
Now
You’re taxed on income, not profit
You only get a 20 percent tax credit
👉 Higher rate taxpayers feel this the most
2. Tenant power is increasing (Renters Reform Bill)
The government has announced plans to abolish Section 21 no fault evictions by May 2026
👉 Less control, more regulation
3. The numbers no longer favour you
Capital Gains Tax allowance reduced
£12,300 in 2022
£6,000 in 2023
£3,000 from 2024
Stamp duty on second properties increased
Now up to a 5 percent surcharge from October 2024
Corporation tax increased for company structures
19 percent to 25 percent from 2023
👉 Across the board, costs are up and tax efficiency is down
🧠 The shift
Property hasn’t changed
👉 The rules around it have
And many landlords haven’t fully adjusted to this yet
⚠️ The uncomfortable truth
I speak to a lot of ‘accidental landlords’
People who never set out to build a property strategy
But ended up renting out a property
👉 Many haven’t optimised for tax, costs, or structure
So while they own property
👉 They are often running a low yield, high effort business
Some are not making meaningful profit once all costs are considered
On paper they own property
In reality they own stress
🤔 So what’s the alternative
Is there a way to invest in property without all the hassle
No tenants
No repairs
No chasing rent
🏢 Enter REITs
A different way to invest in property
Without being the landlord
👉 You don’t need to own the property to benefit from it
🏢 What is a REIT?
A Real Estate Investment Trust
A company that owns or finances income producing property
Pays out most income as dividends
Trades on the stock market
👉 You can invest in property as easily as buying a share
🧩 Types of REITs
Not all REITs are the same
Equity REITs
Own and operate physical properties such as offices, warehouses, and residential blocks
Income comes from rent
Most common type
Mortgage REITs
Invest in property loans and mortgages
Income comes from interest
More sensitive to interest rates
Hybrid REITs
A mix of both approaches
Exposure to property and lending
👉 Most investors focus on equity REITs for long term income and growth
🏢 Examples of REITs (for illustration purposes)
Segro (SGRO)
Warehouses and logistics, benefiting from ecommerce growth
LondonMetric Property (LMP)
Logistics and retail parks, focused on stable income
British Land (BLND)
Large commercial portfolio across offices and retail
Unite Group (UTG)
Student accommodation driven by university demand
👉 Each gives you exposure to different parts of the property market, without the cost, complexity, or responsibility of owning it yourself
⚖️ Property vs REITs what are you actually earning
When people think about property, they tend to focus on the rent
But that is only one component of the return
👉 Long-term outcomes are shaped by both the income generated and how the value of the asset evolves over time (capital appreciation).
Based on typical rent levels relative to property prices,
UK rental yields are often estimated to fall within a 3 to 6 percent range depending on the region
That is before costs such as
Mortgage
Maintenance
Letting fees
Tax
👉 In practice, net returns are often significantly lower
On top of that, UK house prices have generally grown at low single-digit rates over the long term (around 2–5%), with London often experiencing higher growth, but also greater volatility.
👉 This is not unique to property — REITs and equities follow the same pattern
🏢 REITs
Dividend yields are typically in the range of 3 to 7 percent
Alongside potential capital growth driven by
Property values
Rental income growth
And market pricing
📈 Equities for context
Dividend yields typically range between 2 to 4 percent
With long-term growth potential often estimated around 5 to 8 percent or more
🎯 So what does this actually tell you
👉 Across property, REITs, and equities, returns are driven by the same underlying principles
👉 What differs is not just performance
👉 But the structure, accessibility, and level of involvement required to achieve those returns
🧠 What you should consider
When comparing these options, think more holistically
• How much time you want to commit
• How much control you need
• How important liquidity is
• How tax impacts your returns
• How scalable your strategy needs to be
⚖️ The real trade off
🏠 Owning property
Pros
Full control
Ability to add value
Use of leverage
Cons
Time intensive
Ongoing costs
Regulation
Concentration risk
🏢 REITs
Pros
Passive
Diversified
Liquid
Accessible
Cons
No control
Reliant on management
Cannot directly add value
Market volatility
🔑 Final thought
Property has been a trusted asset class for generations
For good reason, it offers tangible assets, control, and the ability to create value over time
But today, there are more ways to invest in property
REITs are one of them
This is not about replacing property
But recognising the trade-offs
👉 It is illiquid
👉 It requires time, capital, and ongoing effort
👉 And it is highly visible, making it easier to tax and regulate
So the question is no longer
Should I invest in property
👉 But what is the most efficient way to gain exposure to it
There are many ways to approach property investing, and I will cover those in future
👉 For now, REITs offer one of the clearest and most accessible alternatives to consider
