How to use the New House Crowd Website

Welcome to the new House Crowd website. With all of the changes we have made, we wanted to provide you with a simple video guide to help guide you through our new improved site. To make it even easier to follow, we have split the guide into two videos with how to register on our the first video directly below, and how to invest using your e-wallet the video beneath that.

If you have any issues, please click on our “live talk” button at the bottom right of the site or email [email protected] and we will aim to help.

How to register on our new House Crowd website

When you are ready to invest you will need to verify your identification and deposit funds into your e-wallet – you can do this at any time (and withdraw unused funds from your e-wallet). If you would like to do this now please watch the video below which explains the process

How to add funds to your e-wallet and verify your identification

Property News Round-up 16/12/15

Property News – All The Latest Updates

Hi guys and welcome to another fortnightly edition of our property news round-up. As usual we take a look at an array of stories from the property industry, today we look at Yorkshire and the Northern Powerhouse to looking at some Christmas decorated homes (just don’t let Dave come round and put your decorations up – you’ll see why!), if you’ve been extremely busy like ourselves, they’ll hopefully give you some inspiration for when you do finally get round to putting your Christmas lights up!

 

Yorkshire Earns Its Place In The Northern Powerhouse

yorkshire northern powerhouse

In the past year the north of England has had a 30 per cent increase in construction and whilst Manchester and both Liverpool dominate, Yorkshire and Humberside are catching up with their north western rivals.

George Osborne’s Northern Powerhouse vision to give major northern cities their very own powers when it comes to planning, housing, transport, and policing, deals have already been discussed and agreed upon for Greater Manchester, Sheffield, and the North East.

However, when it comes to property, many analysts have stated that Yorkshire property growth is linked to simply supplying the housing that people want. Government schemes such as Help To Buy is one major factor that is helping to flourish “Gods Own County” when it comes to property, particularly for families who are starting out.

The county has definitely attracted people from the south, particularly from the capital, end of the day it’s no secret that you get more for your money up north compared with what you would get in the south. As the Examiner mention, the cash you part with for a two-bedroom flat in west London would get you a 10 bedroom, Grade II listed, detached house with three acres of land in Lindley, Huddersfield.

In addition, the vibrant and beautiful Yorkshire countryside and huge investment opportunities in retail, technology, and research plus its rich culture (which we mentioned about in a previous blog post).

With all these factors you can see why Yorkshire has become a crowded marketplace as it continues to compete with Manchester and Liverpool and this one reason why we have had quite a few projects in the region. If you are interested in Yorkshire, feel free to download our South Yorkshire guide.

 

Top Of The League – Manchester A Top Choice For Investors

manchester investment

Since 2010 no other place in the country has generated higher yields for property investors than the north-west city. (Select Property, December 2015).

Investors have gained annual average returns of 6.02%, compared to just 4.79% in London according to data which was generated from lending firm LendInvest.

2015 has been a great year for the city as it has cemented its place as the Northern Powerhouse leader to being named as the UK’s number one city for property investment by HSBC.

Last month a survey which was conducted by accounting firm RSM found that the north-west is the second highest UK region for overseas investment. With a vast amount of investment being poured into the Northern Powerhouse leader as well as having a huge demand for rented spaces, investors have been quick to snap up assets in the city ahead of a predicted growth curve.

 

Is The London Property Market Going To Crash?

London Property Crash

So what’s happening in the capital? To cut a long story short there’s simply too much supply and not enough demand. According to The Independent,  in the last financial quarter alone, 6,000 new apartments were finished, each costing more than £600,000. Currently there are 41,000 homes and flats under construction or being topped out in London priced at north of £1m.

People without children want to live in apartments, these include the  first buyers, buy-to-let investors, and people who’s main home is not in the capital. First-time buyers are therefore being prices out as they simply can’t afford a mortgage or afford to pay a deposit on a house.

In addition, foreign purchases from wealthy Russians and Chinese buyers has started to trickle. Vladimir Putin has put a crackdown on Russian citizens that hold cash overseas meaning that there has been less Russian buyers in London recently. Moving further east, China is also having a corruption purge as mentioned in The Independent.

So what does this all mean for the London property market? According to one property expert, it will take just one single developer not to sell, won’t be able to cover costs, and that’s when the crack will start to happen. He mentions that will be enough to send shockwaves through the market, and bring prices crashing down.

Are you looking for an alternative? If so, we recommend reading our crowdfunding process page to see if property crowdfunding is right for you.

 

Average Property Price Increases to £20,000 in 2015

stamp duty

Figures from Rightmove show that the average selling price for a home in December was £289,452, an increase of around £20,000 from the average house price a year ago. (Which, December, 2015).

The property portal mentioned that the seasonal 1.1% dip in property prices this month is the lowest December fall they have seen since 2006.

They have predicted that prices will reach new records next year and expects new seller asking prices to rise by 6% as the demand in excess of suitable supply continues.

As a result of prices remaining high in London, highly-skilled workers may look for other options and move to more affordable cities such as Manchester, Edinburgh, Cardiff and Leeds.

 

Decorated Christmas Homes – Let it Glow Let it Glow Let it Glow!

christmas lights UK

If you’re like me and leave your Christmas decorations to the last minute and if you are a big fan of Christmas lights you might want to take a look at some of the most Christmas decorated homes in the UK.

If you’re looking at decking up your front with fairy lights we think the 9th example is quite a good one to go for. If you like to go nuts with your lights and Christmas decorations how about the first example?

We’d love to see your creativity, feel free to tweet us your decorated home @TheHouseCrowd.

I hope you can do a better job than me! This is what it would look like if I was left in charge…

christmas decoration fail

 

Image Sources : Telegraph Heavy

 

What Are Your Thoughts?

Which of our chosen property stories has interested you the most? We would love to hear from you, feel free to leave us a comment on our Facebook and Google Plus pages. If you prefer to tweet us, tweet @TheHouseCrowd.

In the meantime if you want to know more about Property Crowdfunding do register for our Information Pack which will tell you all about it. 

Register Now For More Information

 

Property values can fall. Your capital may be at risk & returns may vary. Read our Risk Warning.

Property Still Holds Value Post Brexit

Following the EU referendum vote in late June, there has been a lot of uncertainty in the industry from homeowners, landlords, and housebuilders, all questioning what the future holds for the property market.

Examples such as a £40,000 price reduction in average prices in the capital have set alarm bells ringing.

However, in spite of these uncertainties, some good news is that the regional property market is looking up.

A lot has happened this year, not only with the result to leave Europe, but also in terms of legislation. We’ve seen changes to stamp duty on buy-to-let purchases, as well as changes to rules on multiple occupancy, both of which had an impact on local property markets.

The ramifications of George Osborne’s legislation, as expected, was a significant drop in the number of investors registering to purchase buy-to-let properties.

Moreover, whilst general applicant/buyer registration and property viewings also declined slightly, the number of offers being made were actually up, and sales were also on the up.

Turning our attention to our local area, predicted house price growth in Manchester for 2016-20 stands at 24.6% and rental income for the period is expected to rise by 22.8% (stats taken from MEN)

Examples (which we have recently blogged about) such as Moorfields and Glenbrook’s £40 million residential development and Yo! Homes luxury flats are not only exciting projects, but are are an essential part of the city’s residential strategy to deliver additional, high quality housing.
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So what does this mean for investors?

Firstly, because of the shortage of homes across the length and breadth of the UK, there is little alternative to continuing to invest in residential developments. Doing so will keep the residential property market strong.

In addition, Manchester has been identified as the top city for rental yields. According to LendInvest’s research, the average rental yield in Manchester reached 6.8% between 2010 and 2016.

Research from HSBC, conducted last year, showed that the northern city offered the best yields, with 26% of the population here living within the private rented sector.

Despite the uncertainty of the Brexit vote, the ramifications of leaving the EU could create opportunities for investors, particularly those who are experienced with property investing. Potential property buyers might be put off by the softening of recent house prices, but at the end of the day, they still need somewhere to live, which is great news if you’re a landlord. If property prices do cool – it’s fair to say that investing in property will be very tempting.

So to sum it up, property still holds value post Brexit. Bricks and mortar remain one of the stronger investment choices, as volatility in the stock market means that tangible assets at this moment in time are essential for any investor’s portfolio.

As quite a few commentators have mentioned, a lot of the media focus has been on the ramifications of Brexit vote in London and the South East. However, we strongly believe that the north is a strong alternative with entry prices significantly lower compared with the capital, as well a great place to obtain yields from the likes of student rented accommodation.

In the north we trust!

 
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The Latest P2P News – 18/8/16

P2P News – All The Latest Updates

 

Hi guys and welcome to our August P2P news blog round-up, as usual we will be giving you five of the latest stories from the P2P world. Today we start our round-up by looking at credit card giants Visa and MasterCard who are diving head first into P2P payments to focusing on UK SMEs who are flocking to P2P. Missed our last P2P News round-up? If so, catch up here.

 

Visa and MasterCard dive head first into P2P

Mastercard Visa P2P

A new partnership with Visa and Mastercard will help grow the reach of the clearXchange network, which allows customers at its member banks to make no-fee peer-to-peer (P2P) transfers.

This is for users who have a US-issued debit card, they will be able to use Visa Direct and Mastercard Send respectively to transfer funds in real time from holders of accounts at clearXchange’s member banks, which include Bank of America, JPMorgan Chase, US Bank, and Wells Fargo.

For major credit card networks this is a huge push to go digital. Both credit card titans have been working on their API platforms as well as rebranding their services. The Visa-Mastercard partnership gives clearXchange another string to its bow as it tries to grab digital P2P market share.

These partnerships should open up the world of P2P payments to an entirely new segment of the U.S. population, it can be inferred that it should in turn spur more payments of this type. A U.S. consumer survey revealed that 59% would use P2P payments due to convenience. In addition, 29% of those surveyed said they would use P2P payments for incentives.

 

Samsung Pay takes on PayPal in P2P payment

Samsung P2P

Sticking with payment giants, Samsung is also said to be planning to add a person-to-person, or P2P, transaction function to the mobile payment solution this year and will compete with PayPal’s P2P service Venmo which has gained popularity in The States and Japan respectively.

PayPal recently said the Venmo service saw the amount of transactions processed through the app increase 140 percent on-year to $4 billion in the second quarter. (The Investor, August 2016)

In Samsung’s native South Korea, Kakao, operator of mobile messenger KakaoTalk are spearheading the mobile P2P payment sector.

Commentators have mentioned that no single company is currently leading the mobile payment solution market, the adoption of a P2P function, if deployed, could give a boost to the mobile phone giant in increasing its presence in the market.

 

P2P in China: Why Firms Need Better Risk Controls

China P2P

This is one P2P issue that has had appeared regularly this year and something we have covered in a previous P2P news blog. P2P in China has become a controversial subject due to fraudulent activity taking place which resulted in a number of arrests.

Since 2015, many P2P platforms including Ezubao, the Dada Group, the Kuailu Group, the Zhongjin Group and others have been charged with illegal fundraising, involving tens of billions of yuan. (Wharton, University of Pennsylvania, August 2016)

However, this has not only happened in China, back in May the U.S. Treasury Department released a report criticising the peer-to-peer (P2P) lending business and recommended it be more tightly regulated (like it is here in the UK).

By the end of May this year, China’s P2P industry reached 2.036 trillion yuan (about $300 billion in transaction volumes).

Kaixindai‘s Zhihan Zhou was interviewed by the University of Pennsylvania and mentioned that the challenge for the industry in China goes from small to big. Many P2P platforms start from the lowest end (individual consumption credit) without gradual evolution. This causes trouble subsequently.

He uses U.S. based company Lending Club as an example – It originally hoped to evaluate personal risk based on data extracted from Facebook, Twitter and other social platforms. That is in America, which has much more sophisticated credit investigation and personal data systems than in China. So you can imagine a large amount of P2P business based on personal credit in China will meet trouble in operation if there is no appropriate risk control system in place. (Wharton, University of Pennsylvania, August 2016)

In addition he was asked about why do many P2P companies in China fail, Zhou said it could be linked to expanding too quickly, e.g. their operational capabilities including data accumulation and risk-control models haven’t caught up. He stresses that the industry requires the practitioner to understand both the internet and finance. People from traditional banks tend to stress more on risk control, but less on USX, especially on Internet-user experience. It’s all about balance.

Interested in both P2P and China? Read the full interview here.

 

How Brexit Has Impacted P2P Lending

Brexit crowdfunding

Managing director and founder of Funding Circle, James Meekings recently spoke to Bloomberg about Brexit and P2P Lending.

Bloomberg’s Adam Satariano asked James an array of questions, firstly he asked – “A key part of your business is having access to the European single market, Brexit has caused uncertainties are you thinking of changing your base of operations?”

James mentions that they have various offices in Europe from Berlin to London and have to abide by regulations in every country that they operate in. He also mentioned that the EU referendum doesn’t make a difference to how they behave in different countries.

Another question that was put forward by Mr. Satariano was about Lending Club and how they’ve been going through tumultuous times with its stock collapsing and questions about its internal controls, he asks James how their situation impacts the industry,investors, banks, and hedge funds that they rely on.

James openly admits that is has been a challenging year – from the worries of the Chinese economy, the Lending Club challenges, plus the EU referendum. He says the Lending Club challenges are isolated and are about control issues, in the UK we have a dedicate framework, and for Funding Circle they are seeing institutional investors being more aware and asking more questions about their operational risk framework, which he says is quite right. They have been reassured by the answers that the company has given them.

Watch the full Bloomberg interview here.

 

UK SMEs Flock to P2P Lending Boosting Jobs and Housebuilding

P2P News

The p2p and marketplace lending industry is driving small business and economic growth, particularly in areas hit hardest since the financial crisis, a new report suggests. (Altfi, August 2016)

A report by the Centre for Business and Economics Research (CEBR) revealed that SMEs are increasingly using p2p and marketplace lending platforms to meet their financial needs.

The findings showed that the North East of England was using this particular form of the alternative finance the most. In England, it was the region that was most affected by the 2008 financial crisis.

The CBRE’s research which was produced with Funding Circle, examined loans made through the platform to small businesses since 2010. The results found that lending by p2p platforms in the UK to small businesses rose by 50 per cent from the beginning of 2015 compared to the beginning of 2016. In addition, it claims Funding Circle’s loans have boosted the UK economy by £2.7bn since 2010, supporting 40,000 new jobs and helping small house builders to add 2,200 new homes.

CBRE and Funding Circle’s research also revealed that 61 per cent of borrowers saw their revenue increase as a result of taking a loan, while nearly half of the SMEs reported a rise in profits.

 

What Are Your Thoughts?

Which of our chosen P2P stories has interested you the most? We would love to hear from you, feel free to leave us a comment on our Facebook and Google Plus pages. If you prefer to tweet us, tweet @TheHouseCrowd.

In the meantime if you want to know more about Property Crowdfunding do register for our Information Pack which will tell you all about it. 

Register Now for more Info

£40m Manchester Residential Property Development On The Cards!

It was recently announced that real estate and private equity fund manager, Moorfield, has agreed a deal with Manchester-based property development firm, Glenbrook, to deliver a £40m build to rent scheme at Ellesmere Street in Manchester city centre.

The scheme will offer over 200,000 sq ft of accommodation across three buildings, ranging between 8 and 12 storeys.

Construction will take place at the end of July, with completion scheduled for summer 2018.

Moorfield’s Chief Investment Officer, Charles Ferguson Davie, mentioned in a recent CoStar article : “The Build to Rent sector is in its infancy and we are proud to be at the forefront of it. The sector forms a fundamental part of many cities’ wider residential strategies and we intend to develop more schemes across the country and so help deliver much needed housing supply”.

He also stressed that the Brexit vote has caused a lot of uncertainty, especially for property developers and investors, but feels confident that Moorfield’s commitment to the BTR sector has a wealth of exciting opportunities with an aim to build a 2,000 unit platform.

Glenbrook’s director Ian Sherry, also shared his thoughts on the project, he mentioned that he strongly believes the private rented sector will be resilient, a belief which has been underlined by the property developer’s commitment to bring forward over 750 further units which are planning stages across the region.

In addition, Manchester Place’s CEO Paul Beardmore is also confident about the BTR sector in Manchester. He sees the sector as a fundamental part of city’s wider residential strategy and to deliver additional housing.

The gateway scheme which has been designed by AEW Architects, includes a co-working space surrounded by gardens, concierge facilities, a well-equipped gym, basement car parking with car hire facilities plus an abundance of cycle storage.

A Great Time for Buy-to-Rent Residential Property Development!

According to Legal & General, while Brexit might be putting off large-scale personal decisions such as house-buying, at the end of the day, they still need somewhere to live – so the rental sector has huge potential during these uncertain times.

Dan Batterton, the rent to build fund manager at Legal & General recently mentioned in an interview in Architects’ Journal : “We are hearing demand from more people wanting to rent and not wanting to buy. When we look round the world to established build to rent markets, such as the US, the rental sector provides consistent demand to the construction industry regardless of market conditions – it is less cyclical than building for sale.”

He also says that there may also be less competition for land between now and the end of the year because traditional housebuilders are known for pausing land acquisition programmes, which allows BTR investors to make their move.

BTR schemes are known for providing large communal areas and building a sense of community, which is essential for ensuring people stay. Having areas (as mentioned in the Ellesmere Street example) where people can socialise, make friends and will therefore make them rent for a longer period than see before, plus will help drive yields for investors.

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The Northern Powerhouse Powers On

The massive development and growth in the North West is continuing at an unprecedented rate. And Andrew Percy, the minister charged with making the Northern Powerhouse a reality, has recently declared that, whilst there is some concern about Brexit’s effect on the property market elsewhere, the vote to leave the EU has brought the North West a “world of possibilities”.

Percy went on to say that “the economic potential of the North of England is huge. Investors around the world can already see that for themselves, with foreign direct investment in the area more than doubling over the past two years”.

He’s not wrong.

In 2014, overseas investors injected £3.4 billion into prime property in Manchester. In the same year, the Government committed £476.7 million to boost Manchester’s economic growth, and they’ve just added another £56.6 million to the pot. This influx of Government support is set to create a wealth of jobs, stimulate inward investment, develop the region’s infrastructure and boost growth in general.

A total of 40 major infrastructure projects are about to start in the North West. A £600 million Northern Hub rail project is underway, providing 700 extra trains every day, building a strong and modern network between Manchester and its major satellite towns and cities, as well as the rest of the UK, and – crucially – London. Then there’s Manchester Airport, which is expanding into the UK’s first ‘airport city’ with leisure facilities, offices, on site logistics and manufacturing. This comes via a £800 million cash injection from the Beijing Construction Engineering Group.

At present, residential prices are about 19% below the UK average, but this is about to change, and probably dramatically.

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Almost half of the Top 500 businesses in the North West are based in Manchester, along with a wealth of FTSE 100 companies, and plenty more foreign-owned ones. The Manchester Enterprise Zone has offered plenty of incentives for businesses, causing a massive influx of businesses relocating to the area. Existing companies continue to expand and to thrive in the region; all these promising evidences of growth will only be increased by this continued Government investment.

Manchester is also increasing in affluence. Residents’ wages in the Manchester area have gone up 15% in just 8 years, with employment up 8% over the last 5 years. Employment is forecast to grow by a further 16% in the next 20 years.

Finally, and perhaps most interestingly for our investors, HSBC research has recently revealed that Manchester has the second highest buy-to-let investment yields in the UK, an average of 7.98%. The only higher yields were in Southampton. Further research from LendInvest concluded that the North West produced the best average rental yields over the last 5 years. Investors could achieve yields some 200% higher with property outside of London, LendInvest found.

4000 new built-to-rent properties per year are planned, to meet the massive demand for rental accommodation within the city – which is currently outpacing supply. At present, 85% of households within the city are within the private rented sector.

This surplus of demand in Manchester is showing no signs of stopping, as people increasingly flock to the city for its wealth of employment opportunities, as well as the thriving culture and infrastructure the city offers.

As evidence continues to mount in favour of Manchester, we will continue to provide our investors with some of the best potential property investment opportunities to be found in the UK. As always, there are no guarantees, but we will let the stats speak for themselves.

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The Latest Crowdfunding News – 10/7/16

The Latest Crowdfunding News

 

Hi guys and welcome to our first crowdfunding news edition for August. As usual we will be taking a look at the latest goings-on in the world of crowdfunding and today we start our round-up by focusing on London’s most exciting crowdfunding campaigns of the summer to looking at why equity crowdfunding matters to small business. Missed our last crowdfunding round-up? If so, catch up here.

 

London’s Most Exciting Crowdfunding Campaigns This Summer

London Property Prices

Turning to the crowd to fund the latest expansion plans or business venture as we know is becoming an increasingly popular option for businesses of all shapes and sizes, and last year crowdfunding in the UK reached £245m.

This year it continues to go from strength to strength with the likes of SyndicateRoom, Seedrs, and Crowdcube dominating alternative investment.

So what campaigns have excited those in the capital? Starting with Revolut, the London fintech launched a crowdfunding campaign last month in order to top up its oversubscribed £7m Series A funding round.

The fintech startup, which allows users to spend cash abroad on a fee-free Mastercard in conjunction with its app, experienced overwhelming demand with a record £12m pledged by interested parties within 10 hours of its launch according to Business site Bdaily.

We briefly mentioned about Crowdcube being a main player when it came to alternative investment, they too got in on the act and aimed at reaching a 5m raise which they exceeded. Crowdcube attracted £6.2 million of investment on its own platform, 124% more than it originally targeted.

Another exciting campaign that we have stumbled across is from Hire Space.

The London startup that has had big client names such as Facebook and Red Bull, closed its 500k crowdfunding campaign back in June. Their funding came from over 200 venues, event professionals and private investors respectively.

According to Bdaily : “Co-founder Edward Poland has some ambitious plans for the firm following the investment drive, with plans to ‘revolutionise the events industry’ both in the UK and abroad as Hire Space entrenches its position at the forefront of the market.”

We will definitely be watching this space (no pun intended!) for more future crowdfunding campaigns in the capital, here are two more from the Bdaily article that might be of interest, view here.

 

Crowdfunding App Tilt Adds P2P features

tilt crowdfunding p2p

We would normally add a P2P based story in our P2P news round-ups (if you missed our last one a fortnight ago you can catch up here), however, we previously mentioned Tilt in a December post and thought we would keep you updated about the app.

For those of you who have never heard of Tilt, in a nutshell the app is for groups of friends to pool money together for a group goals such as fundraising or funding a trip for example.

Tilt is now focusing on P2P features, the platform’s owners have opted to launch a formal P2P transfer function through the addition of “pay” and “request” buttons according to Business Insider.

Their 18-24 user base falls directly into the audience most attuned to digital P2P payments. Mainly because of the social nature of the app itself and many users know each other. This could definitely help the application thrive, because P2P applications benefit from engaged users bringing new users into the mix, who continue to refer additional customers and help expand Tilt’s network.

Image source : Tilt Twitter

Brexit Blamed for Fall in Crowdfunding Deals

Brexit crowdfunding

According to research by Beauhurst, they found out that crowdfunding platforms raised £87.4m in the first half of 2016, a drop of just over 4 per cent from the £91.3m raised in the previous six months. (FT.com, August, 2016)

In addition, their findings concluded that the uncertainty around the vote to leave the EU and the nature of the UK’s relationship with Europe has contributed to having deals being delayed or even abandoned.

UK Crowdfunding Association (UKCFA) spokesman Bruce Davis mentioned in the FT that the dip in deals is just a pause. In addition he stresses that the market has slowed down due to recent events, however, the UK is still taking a large share of the market.

Mr. Davis said that The UKCFA are confident that the number of deals will grow again, he stated in the FT : “The key to that will be strong signals from the government on strategy to see where it wants to see growth and investment.”

 

Dave Goes to Rio Thanks to Crowdfunding

RIO 2016 Crowdfunding

This one is for all you Olympics fans out that there! Dave Leach, a coach at Lewes AC has had a string of successful athletes at the Sussex based athletics club, including Rob Mullett who was selected to Represent Team GB at the Rio Olympics for the Men’s 3000m steeplechase.

Dave’s dream was to travel to Rio with Rob (who he has coached Rob since he was 12 years old), thanks to crowdfunding, Dave’s dream came true!

Club members, friends and colleagues used crowdfunding to raise the money to send Dave to the Brazilian host city; sponsors have kitted Dave and Rob from head to toe in Olympic fashion to be ready for all weather conditions there. In fact the funding was so successful, the target was reached and beaten (the initial target was 3k, however, 5k was raised for Dave).

For a coach who hasn’t been paid for 25 years and has never been on a plane before, this is another example of how crowdfunding has saved the day once again!

Image source : The Telegraph

Why Equity Crowdfunding Matters to Small Business – A View from The U.S.

Equity Crowdfunding USA

For those of you who follow our various blog round-ups know that we look at quite a few viewpoints and stories from all over the world, this time we turn our attention to across the pond.

A series of recent laws and regulations have opened the door to three new vehicles for raising investment dollars for small businesses through equity crowdfunding. These new forms of investment crowdfunding may well transform the nature of small business capital raising in the United States, by enabling individual investors to take equity stakes in new companies as Entrepreneur and Yahoo Finance both explain.

Last September, Title IV on the JOBS Act went into effect modifying regulation A of the Securities Act. In layman’s terms this piece of legislation has a very important meaning – growing companies in The States can now go public in a small offering and raise up to $50,000,000 dollars through a streamlined, low-cost alternative to a full public offering.

Companies can now test the water so to speak, meaning that small companies can let the public know that they are thinking of raising investment dollars. In America this form of announcement has been illegal since the 30’s, however, due to transparency levels and openness that these array of online platforms provide, it has now been made legal.

As a result of the legislation, many small business in America have learned to leverage small early stage investments via crowdfunding to increase their bargaining power and get more money from venture capitalists later as Richard Swart mentions in his article and these new rules give multiple financing options available to small businesses across the country.

 

What Are Your Thoughts?

Which of our chosen crowdfunding stories has interested you the most? We would love to hear from you, feel free to leave us a comment on our Facebook and Google Plus pages. If you prefer to tweet us, tweet @TheHouseCrowd.

In the meantime if you want to know more about Property Crowdfunding do register for our Information Pack which will tell you all about it. 

Register Now for more Info

H&M Distribution Unit Opens in Cheshire

Here at The House Crowd, we are always extolling the virtues of our beloved North West. Our part of the country is seeing an influx of regeneration and development not seen since the Industrial Revolution, and it’s got everyone very excited.

We love playing a role (albeit a small one) in making the North West of England the thriving hub of business and creativity that it’s becoming. That’s why we centre on this part of the country for the focus of our developments, creating a new wave of beautiful homes and thriving communities, which will go hand in hand with our vision for a bright future for the region. And this is a vision which a whole swathe of residential property developers, as well as big companies, share.

The All-New H&M Distribution Unit Arrives!

As a shining example of this, we are pleased to share the news that world-leading fashion retailer, H&M, has recently leased a large (105,757 sq ft) unit in mid-Cheshire.

H&M has come to the Winsford Industrial Estate, via Custodian REIT. Situated ten miles from junctions 18 and 19 of the M6, H&M joins other big companies, Iveco, Henkel and Jiffy Packaging, who all occupy units on the site. REIT paid £5.55million for the unit, and has leased the property to H&M until June 2025. The rent is currently £423,000 per year, which reflects a net initial yield of 7.1%, and an expected reversionary yield of around 8.5%.

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The Managing Director of Custodian Capital, the discretionary investment manager, Richard Shepherd-Ross, has described the unit as “modern and well-located, as well as noting that the unit has been recently refurbished, and the location includes around 1.8 acres of potential expansion land, which may be useful for the brand’s future requirements.

As if any more proof was needed that the North West is becoming the UK’s leading location for industrial and retail growth, this is it. Bringing such a world-renowned brand to our part of the country speaks volumes of the potential large companies are recognising in the area. With such companies bringing integral factions of their business to the area, the obvious result is an influx of new jobs. And with new employees comes, of course, the need for suitable homes.

The transport network in the North West is currently excellent, and the ongoing plans for substantial development of public transport in the region will make it even easier for employees to reach those jobs.

Just another reason why investment in property in the North West is an increasingly smart investment. It’s also the principal region that will almost certainly withstand the shock to the property market caused by Brexit, unlike London, whose bubble is looking set to burst at any time.

Of course, property investment is never a sure thing, but at The House Crowd, we could not be more confident of the consistent predictable returns available in the North West. And with our simple, transparent investments suitable for most types of investor, we are proud to be a part of the crowdfunding phenomenon that is democratising the property market at such a crucial time.

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What is Loan To Value (LTV)?

At The House Crowd, we get a lot of questions from investors about the term ‘LTV’. We have included a handy definition in our glossary of investment terms which looks like this:

Loan to Value (LTV) – A term commonly used by banks and building societies to represent the ratio of the first mortgage lien* as a percentage of the total appraised value of real property. For instance, if someone borrows £130,000 to purchase a house worth £150,000, the LTV ratio is £130,000 to £150,000 or £130,000/£150,000, or 87%. The remaining 13% represent the lender’s ‘haircut’, adding up to 100% and being covered from the borrower’s equity. The higher the LTV ratio then the riskier the loan is for a lender.

(* Lien – the right to keep possession of property belonging to another person until a debt owed by that person is discharged)

Still confused? Well, let’s try and clear things up…

Basically, LTV, or Loan-to-Value is a statement about how much borrowing you have compared to the value of your property. So if your property is worth £100,000 and you have a £75,000 loan secured against the property – that loan is at 75% LTV.

The lender knows that if you default on the loan as long as the property is sold for more than 75% of its valuation (at the time the loan was made) then he will not lose any money.

Let’s try and simplify that with a handy diagram:

LOAN TO VALUE

At The House Crowd our secured loans have a maximum value of 75% LTV and are secured by a legal charge against the property. All these charges are registered directly with the Land Registry, ensuring that any further deals or sales of the property include the charge owners correctly within the process.

If they are secured by a second charge then the LTV is based on the total borrowing including the first charge against the property value.

For example: if a property is valued at £600,000 and a bank has a first charge on that property that requires a sum of £200,000 to clear, if we then loan a further £200,000 this would take the total borrowing to £400,000 and therefore result in a combined LTV of 66.7%.

If the borrower defaults on the loan, but not on the 1st charge, then we would repossess and sell the property. The 1st charge holder would be paid first, and then we would take any capital amount owed to us and any interest.  

This is what would happen:

LOAN TO VALUE

What Can I Do To Buffer My Property Investment Against Market Fluctuations?

Our loans are usually for less than 12 months. We believe limiting our loans to 75% LTV provides a reasonable level of security should the value of the property fall during that short period, whilst allowing us to pay our investors a very healthy return. If you are more risk averse then you may choose to invest in loans with a lower LTV (but are likely to receive a lower rate of return as borrowers will expect to pay a lower interest rate.)

Investing in this way allows you to make great returns from property investment without you ever having to lay a finger on the property yourself!

I’ve Still Got Questions – Help!

If you’ve still got questions, then don’t hesitate to drop us a line. We have the chat option on our website, or you can give us a bell or an email. We’re always happy to help!

 

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