Two groups of financial institutions are reviving the idea of trading derivatives linked to UK real-estate prices, five years after the first attempt to do this ended in disaster.
Last November, Barclays de Zoete Wedd (BZW) began selling property index forwards (PIFs). These are over-the-counter instruments based on an annual index of UK institutional property holdings compiled by Independent Property Databank (IPD), a property research company.
PIFs allow investors to bet on the real-estate market without having to buy an intermediate security such as property unit trusts or property itself.
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