George Osborne has announced that mortgage relief on buy to let will be restricted to the owner's basic rate of tax from 2017.
One of the effects of the changes could well be a reduction in the levels of gearing and thus an increase in the equity required to purchase a Buy to Let property. The ability to gear Buy to Let properties highly is one of its principal attractions when compared to other ownership structures.
Buy to Let mortgages have been available at 60% - 80% LTV with the best deals at the lower end of the range. If the best pricing were to fall to mortgages in the 50% range then returns from Buy to Let should theoretically at least, be closer to those achievable from a residential REIT.
Add in that a Reit would benefit from diversification and economies of scale, and the playing field starts to look more level.