In the speech of her palace’s house, the Chancellor developed a series of reforms aimed at stimulating economic growth in the UK. Part of this includes a campaign to increase shares in stocks and shares ISAS.

These are called LEDS reforms. If they succeed, they can provide a big boost to British companies – but can they also lead to a UK’s Thor Market?

UK growth

Most of the time, companies grow by making investments. This includes opening new sites, taking more people, developing new products, etc.

The problem is, all this costs money. While companies can use their own profits, they have two options if they want to grow faster. They can either borrow it (by taking debts) or asking investors about it (by issuing shares).

In the United Kingdom, however, there are some issues. The first is that the banking regulations submitted after the great financial crisis reduce the competition between the lenders, making debts more expensive.

Relatively low stock prices make the stock release expensive money raising. But Leeds reforms announced by the counselor are designed to combat both problems.

Leeds repairs

On the side of the debt, Leeds reforms are looking to make lending more competitive. In the first place, this includes the relaxation of some restrictions imposed on smaller banks, which liberates the capital for loans.

As with most things, more supply means lower prices. So the idea is that this should be translated into better opportunities for companies to follow growth projects with cheaper debts.

On the side of the stocks, the advisor announced plans to encourage the long -term savers to invest in stocks, rather than commitment to criticism. Increased demand for stocks can help increase prices.

This means that companies can collect more cash by issuing fewer shares, making more viable projects. The resulting profit growth can send stock prices up.

example

One example is Ownership (LSE: LMP). The company is a real estate investment fund (Reit), which expands its warehouse and industrial distribution centers.

The problem is that real estate investment funds must distribute 90 % of their tax -free income as profits. This makes them very attractive investment in income, but it limits the prospects of their growth.

Please note that the tax transaction depends on the individual conditions of each customer and may be subject to change in the future. The content in this article is provided for information purposes only. It is not intended to be, nor form any form of tax advice.

Londonmetric property investments in the past ten years have caused their shares to more than one Triple, and their long -term debts have risen by 270 %. The moves have succeeded, but they were expensive.

There is a risk that the cheapest debts may lead to an increase in real estate prices, which makes the acquisitions more expensive. But the real estate sector seems to me like a potential beneficiary of LEDS reforms.

Taurus market forward?

Since 2008, UK’s shares have been disabled by a few things. One is the set of regulations that have limited growth of profits and the other is the lack of attention from retailers.

Leeds reforms aim to change both parts of this. If they succeed, UK shares may get a double batch of more convenient trading conditions and more investors are ready to buy shares.

The sector that I see as a clear beneficiary is real estate – more specificly, real estate investment funds. With a profit return exceeding 6 %, I think Londonmetric property is worth considering today’s prices.