Britain’s first regulated stock exchange devoted to shares in residential property will get under way next month, The Times has learnt.

The Property Investment Market (TPIM), the company that has set up the exchange, is aiming to target the tens of thousands of Britons who cannot afford to buy their first or second home but still want to invest in the multi-billion-pound housing market.

The firm, which is backed by Royal Bank of Scotland, has bought 30 homes and signed up a few thousand investors who own shares tied to each individual property.

Stephen Kenny, the chief executive and founder of TPIM, said that he and RBS had agreed a target of about 1,400 properties on the exchange by the end of 2009, worth about £300 million, mostly in Britain but also in other parts of Western Europe.

Investors can buy as little as one £1 share in each property or invest tens of thousands of pounds in a property or small batches of addresses bought at any one time.

The market is due to receive its stamp of approval as a regulated alternative trading system (ATS) next month from the Financial Services Authority, the City watchdog. Obtaining this official status will allow overseas investors to buy and sell shares on TPIM.

Mr Kenny has set a target of one million investors using TPIM by the end of next year. Many of these investors may, for example, be Germans looking to buy shares in German residential property, a country that Gavin Davidson, the property director and co-founder, wants to buy into soon.

TPIM has just bought its latest batch of five new homes from a George Wimpey site in Caversham, Reading, each of which is priced at just under £200,000. Mr Kenny and Mr Davidson said that they are in talks to buy similar-sized groups of houses from David Wilson Homes — the up-market construction company that is set to be part of Barratt Developments — and Charles Church, the smart homes division of Persimmon, the FTSE 100 housebuilder.

It is thought that Mr Kenny will start talks to buy more homes directly from Berkeley Group, London’s largest housebuilder, and then sell them on to investors.

Shares in the properties could be put into a self-investment pension plan (Sipp), as the company has been assured that the Treasury is comfortable with the scheme.

Last year government plans to widen the ability of Sipps to invest directly into residential property had to be watered down after an outcry that the pension system would create a new generation of “jet to let” investors, who would benefit from the tax perks of pension investing to buy second homes and still holiday in them.

Click movers

—Window shoppers log on to thepropertyinvestment market.com where they can view properties trading and those coming up for sale

—Each house is displayed with picture, gross price paid by the exchange to get the asset on its market and, if let, the expected annual yield

—Viewers can click through for fuller details, similar to an estate agent’s brochure Users register and open an account to buy and sell shares

—Dividends are paid quarterly and the price of each share is quoted daily

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