Investment bank Goldman Sachs (GS) is offering investors the opportunity to speculate on the housing market without the commitment of buying a property.
GS is creating covered warrants and certificates linked to the property market and based on the Halifax House Price Index. Covered warrants and certificates are financial tools that give the owner the right to buy or sell an asset at a set price within a defined time frame.
Investors can choose between having exposure to the whole UK housing market or only in Greater London.
Mark Valentine, executive director at Goldman Sachs International, said: ‘These new cov- ered warrants and certificates will pro- vide investors with an attractive means of gaining or hedging exposure to the UK and London residential property market.’
Investors would be limited to a maximum loss of their original investment and there will be no exposure to Stamp Duty. Mark Graves, managing director of mortgage broker Mortgages Direct, said such products had a role to play, but only if they were sold to the correct target market.
He said: ‘The problem is that sometimes products do not end up getting sold to just that set of people.’ As such he hoped it would not become a mass-market proposition, and that brokers selling it would ensure it was appropriate for the clients taking it up.