OVER the last few years there has been a move from house purchase to shared ownership or rental, mainly due to affordability. More recently, even successful landlords are losing interest in the sector, as taxation and regulatory disincentives dampen the mood. This, tied to the costs of borrowing, could act as a brake on Government plans to increase house building.
The good news is that a novel and accessible way of investing in property is now available which could boost the interest in house building. Crowdfunding is spreading into the world of real estate, with various exciting new entrants. These options range from the likes of ThinCats or Assetz Capital who are aimed at the serious property developer or investor, to some of the very new platforms such as Property Moose or Property Partner which are aimed at the more casual investor looking to invest as little as £10.
Platforms such as ThinCats are ideal for the property developer looking for a relatively quick source of finance at better rates than most bridging loans and no repayment penalties. The loan period can last from as little as six months up to several years for a larger project.
In the case of platforms for the casual investor, the benefits and burdens of investment risk are shared by hundreds, of individual investors. An investor can diversify their portfolio, so they could, in theory, invest £10 in a terraced house in Leeds, £20 in an apartment block in Bristol and £30 in a retail outlet in London. All the due diligence, legal and running costs would be funded through the crowd, and would thus would be fractional (per investor) compared to the costs of investing on your own or in a traditional joint venture. These projects tend to be over three to five years.
It is important to remember, however, that investment of this kind may put your capital at risk, so ensure that you seek and take heed of appropriate advice. For more details on options available contact us at Business finance Services on 01327 349 779 or email