Property News Round-up 25/10/16

Property News All The Latest Updates

 

Hi guys and welcome to our property news round-up, as usual we give you a quick snapshot of the latest goings-on in the property world. This week we start by looking at property rentals will outstrip property sales in 2017 to focusing on planning approvals in the Northern Powerhouse and London. Missed our last blog news round-ups? If so, catch up here.

 

Property Rentals Will Outstrip Property Sales in 2017

Property Money

Forecasts have suggested that 2017 might be the first year in eight decades where property rentals will outstrip property sales.

Johnny Morris, research director at Countrywide, mentioned in a recent Guardian article : “As some would-be buyers and sellers sit on their hands, Brexit-induced uncertainty has continued to boost the rental market … September saw record activity, with increasing numbers of lets agreed and tenants choosing to renew their contracts. On current trends 2017 could be the first time since the 1930s that more homes are let than sold.”

A sobering thought – homeownership levels had fallen to their lowest levels in 30 years at the start of 2016, although recent figures from mortgage lenders showed a pick-up in the number of loans taken out for house purchases, the number of homes for sale remains near a record low and prices are rising. Recent events such as Brexit uncertainty as well as a lack of supply has also contributed to the dip.

Being able to get onto the property ladder is becoming even more difficult for first time buyers with prices going up steadily.

However, that’s only the beginning.The 3% stamp duty surcharge that the government introduced back in April has led to a boom in buy-to-let purchase, the ramifications have led to a bigger amount of rental properties available to tenants.

The rental market has grown at such a rapid rate that the property industry needs to start focusing on offering the right kind of property for an array of people from millennials to retirees. Many commentators have mentioned that the industry needs to move away from traditional small portfolio landlords renting out their old home to a more professional approach offering tenants the best value and services available.

 

UK Rents Growing Fastest in Manchester

Manchester Property

Rental rates have risen by 7.1% in the north-west city over the last 12 months, as more investors turn to Manchester in search of the highest yields. (Select Property Group, October 2016)

The Northern Powerhouse city was named last year by HSBC as the city with the highest yields in the country. A recent report from Countrywide outlines that rents in the UK are now rising the fastest in Manchester.

At a national level, the rate of growth in the 12 months to September 2016 was 2.2% (last year it was at 2.8%). However,in Manchester, the rent growth rose by 7.1%, more than any other city in the UK. In addition, it’s also worth noting, of the 20 largest cities in the UK, the five which recorded the largest rental rate rises were in the north and Scotland, including York, Glasgow and Liverpool.

In contrast, the south paints a different picture, for example, London and Cambridge had the highest proportion of landlords cutting monthly rates in the last year.

Both domestic and international investors are turning to Manchester to find a property asset that can deliver a strong and sustainable income.

Johnny Morris, research director at Countrywide (who we mentioned in the previous news item) mentioned that there’s a different type of two speed rental market that’s emerging, with falling stock and growing demand driving rental growth in many northern cities at a higher rate than those in the south.

 

Reasons Why Build-To-Rent is The Future of Rented Living

build to rent

This news item links with the first – in a nutshell, a new sector and product that’s on the horizon and one that syncs very well with a tenant’s lifestyle and eliminates compromise – I’m of course referring to build-to-rent.

So why is build to rent the future of renting? Firstly, build-to-rent has been constructed with today’s end-user in mind. Ideal amenities such as gyms and communal cinema rooms in the same building. Locations in the city centre close to friends and employment hubs are ideal for the likes of millennials.

A key point about build to rent that it creates a community. Having these build-to-rent apartments slap bang in the city attracts people with similar jobs and interests, with friendships and an array of activities, tenants will want to rent for a longer period.

To simply put it, it just makes sense. Tenants want it, the government agrees with the build-to-rent idea, and investors too want a slice of the share too.

Demand for rental accommodation has increased by over 17k per month over the last decade, as more people move away from homeownership and turn to the private rented sector instead. As mentioned in the first news item, with property rentals looking to outstrip property sales next year, build-to-rent is more than likely to become the number one rental product in the UK. It’s therefore an investment opportunity that cannot be ignored.

 

A Brief Look At China’s Passion For Foreign Property

China P2P

Many real-estate agents and property experts in east Asia believe a new wave of investment is just getting under way, as mainland investors develop a taste for international real estate, including postcodes up and down the UK. (The Guardian, September 2016)

When it comes to buying property, Chinese investors look at four main motivations: investment, lifestyle, emigration and education. Many seek a foothold in the UK and hope their children will go on to study at university.

In addition, cities such as London are seen as a secure place to store money that investors want to move out of China, to guard against the devaluation of the Yuan. It’s known that people in mainland China want to get their money out. They therefore use cities such as London as a safe-haven to store their hard earned cash.

However, it’s not just London, investment is now heading north and Chinese investors and hungry to invest in the likes of Manchester and Liverpool.

Manchester for example has had a lot of interest from China when president Xi Jinping visited the city last year to lend his support to George Osborne’s “northern powerhouse” project during his first state visit to the UK.

Since 2014, Chinese investors have been rushing to buy houses in the UK, the high rental yields and stable property prices have been key driving factors.

Also, the UK is very attractive to Chinese property investors because it does not have the high duties that have been introduced in countries such as Canada and Australia for foreign buyers.

Property industry commentators argue that foreign investment from countries such as China is helping to transform urban centres around the globe, they mention that it’s the only way to finance affordable new homes in cities such as London.

They also see foreign investment beneficial for helping to create jobs, improve infrastructure, and in general making the quality of life better.

However, London mayor Sadiq Khan has warned against the capital’s homes being used “as gold bricks for investment”, and has spoken out over how some new developments are given to foreign investors before locals.

Khan mentioned back in May that he sees no point in building homes in the capital if they are bought by investors from the Middle East and Asia.

He stressed that he didn’t want homes being left empty. He emphasized that he doesn’t want London to be the world’s capital for money laundering and wants to give first dibs to people who live in the capital.

 

Northern Powerhouse Outstrips London for Planning Decisions

northern powerhouse

New research shows that local planning authorities in the Northern Powerhouse deliver 22% more planning decisions per resident than those in Greater London.

Research published by the British Property Federation and GL Hearn revealed that 25 boroughs in the Northern Powerhouse made 11 major planning application decisions per 100,000 residents in comparison to nine decisions per 100,000 residents in the Greater London area.

Melanie Leech, chief executive of the British Property Federation, said: ‘It is really encouraging to see the North live up to its ‘powerhouse’ moniker, and to be powering ahead with its development pipeline. The development industry has an important part to play in ensuring growth across the country, and it is good to see that there is lots of activity in the North West. (LocalGov, October 2016)

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.

 

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The Latest P2P News – 12/10/16

P2P News – All The Latest Updates

 

Hi guys and welcome to our October P2P news blog round-up. As usual, we’ll be taking a look at the latest goings-on in the P2P world and today we start our round-up and look at the proposed regulations that peer-to-peer lenders would like to see in place to giving you some of our very own P2P tips! Missed our previous round-ups? If so, catch up here.

Peer-To-Peer Lenders Want Tougher Regulations

P2P News

Peer-to-peer lenders have said there is an “urgent” need for tougher regulation of their own sector to ensure that consumers understand the risks they are exposed to, thus avoiding a future backlash if investments fail to perform. (FT.com, October 2016)

Peer-to-Peer Finance Association (P2PFA)’s Robert Pettigrew stressed that investors need to realise that peer-to-peer lending products in no shape or form resemble anything equivalent to the guarantees represented by a bank deposit.

The P2PFA mentioned that advertisements from lenders suggesting that peer-to-peer loans were similar to a bank or savings deposit with instant access were “unhelpful”. Eight of the P2PFA members who control a large majority of the UK market are requesting that the regulator sets out stricter guidelines on how loans are marketed to consumers, as well as setting out common standards for declaring bad debts.

Back in February, Lord Adair Turner (who will feature in our third P2P news story) — former chair of the FCA’s predecessor, the Financial Services Authority — told a journalist that, over the next decade, peer-to-peer loans could be the source of losses that “make the worst bankers look like absolute lending geniuses”.

The P2PFA have admitted that they would welcome the development of new rules to “protect not exclude” retail investors, they claim that peer-to-peer lenders have introduced beneficial competition and choice into the investment and borrowing markets respectively.

There has been this fear by some that P2P is confusing in understanding the differences between the concept and also equity crowdfunding.

However, as mentioned in our previous P2P news round-up, the P2PFA stated that there was no evidence to suggest that consumers are currently underestimating the risks associated with peer-to-peer lending as different platforms have adopted a variety of approaches to ensure a high level of consumer understanding. Top industry lenders recommend that investors should require financial advice if they are unsure about the investing process.

Image source : Investopedia

Chinese P2P: Loans More Than Doubled in September

China P2P

Chinese P2P loans more than doubled to a record high at the end of September, despite the on-going challenges that the Chinese authorities face in regulating the exponentially growing sector.According to the official Xinhua news agency, P2P loans surged 153.5 percent to 956 billion yuan ($143 billion).

What’s particularly interesting from the data is that more than a month after China’s banking regulator used aggressive measures to restrain the P2P sector, warning that almost half of the 4,000-odd online lending platforms were seen as problematic.

So how has The Red Dragon been able to sustain P2P growth during problematic times? Many people moving from rural areas have a difficult time getting the loans they need because there is perception that they are not credit-worthy, because of this, there has been a surge in demand for P2P lending products and services. The government has taken steps to clean up the industry after a series of scandals (such as the Ezubao scandal which springs to mind).

 

Lord Turner Changes His Tune on P2P Lending

lord turner p2p

As briefly mentioned in the first story, one of the industry’s most well-known critics of peer-to-peer lending, Lord Adair Turner, has changed of his tune, he is now suggesting that the sector could potentially prevent a future credit crunch.

During a recent speech, Lord Turner was complimentary of the industry, he even suggested that online peer-to-peer lenders could perform credit underwriting.

In addition, he predicts that P2P lending could even act as a “spare tyre to the credit system, making credit crunches less likely.”

In contrast, he still stood by his comments that he made back in February about P2P causing losses, but understood that this loss would only make up a small part of the sector.

Image source : Business Insider

 

P2PFA Releases Major Research on Economics of P2P Lending

p2p research

The P2PFA has released a commissioned study on the economics of the peer to peer lending market in the UK. The independent assessment, provided by the economic consulting firm of Oxera, analysed the risks, costs and benefits of peer-to-peer lending and provided an objective account of how P2P business models work. (Crowdfund Insider, October 2016)

The research primarily focused on the eight-member platforms of the P2PFA – which are known for their high standards of transparency and operation – the P2PFA members comprise over seventy-five per cent of the UK market.

Oxera’s Reinder van Dijk, sees P2P lending as a “real innovation” bringing benefits to both borrowers and investors.

Some key takeaways from the research was that P2P lending has created additional competition and choice in the market for loans and investment, in addition, it provides alternatives for retail investors, opening up access to risk-and-return from an asset class of consumer and business loans with net returns of between 4%-8%.

Moreover, P2P lending does not create systemic risk, and platforms are well-placed to weather a downturn in the credit cycle – borrower defaults would need to increase at least threefold to reduce average interest rates to investors below zero.

It was also revealed that the majority of investors have a good understanding of the associated risks involved.

You can read the full report below.

UK P2PFA 2016.09.30 – Oxera Report – The Economics of P2P Lending by CrowdfundInsider on Scribd

 

Basic P2P Tips

p2p tips

To end this month’s round-up, we thought we would share some basic P2P tips to help you on your way to getting started with peer to peer investments.

Our first P2P tip of the day is to diversify – just like with a stock market portfolio diversifying is key, with P2P lending, you should further diversify by spreading investments across multiple platforms. End of the day, the more you diversify, the less likely you’ll be to lose money on your investment.

Our second tip is to do your research. As Francis Bacon once said knowledge is power. Read the reviews on each platform you consider before getting involved. In addition, ask fellow investors of their experiences. It’s worth noting that not all lending platforms are the same, so make sure you’ve researched how they conduct their business and study their procedures for screening borrowers, as well as learning how they deal with late payments and defaults.

Finally, make sure you re-invest! The last thing you want is to have a static investment, DO take advantage of the compounding yields to be gained by continual reinvestment of returns into new loans.

Looking for more tips? It’s a bit of luck we’re a generous bunch at The House Crowd, view our 7 Top Tips for Investing in P2P Lending here.

 

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. 

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The Latest Crowdfunding News – 6/10/16

The Latest Crowdfunding News

 

Hi guys and welcome to another crowdfunding news edition, as usual, we will be travelling around the UK and around the globe in order to give you a snapshot of the latest goings-on in the crowdfunding world. Today we start our round-up and focus on The FCA and Cambridge University partnership, both have teamed up to review the current state of alternative finance, to ending our round-up in China. Missed our previous blog round-ups? If so, catch up here.

 

FCA & Cambridge University Team Up to Review UK Alternative Finance

hands

The Financial Conduct Authority (The FCA) and the Cambridge Centre for Alternative Finance (CCAF) have teamed up to assist in the review of the UK alternative finance industry. The joint project will inform the FCA’s ongoing post-implementation review of crowdfunding regulation which is currently in process.

There’s a consensus that the UK is a global leader when it comes to alternative finance regulation.

Moreover, The Cambridge Centre for Alternative Finance is a global leader in research on disruptive finance. The pair will be working on a program of research that will identify any changes in the nature of the industry,clients’ expectations, plus its overall place in the financial services landscape.

The unique partnership will be primarily looking at what the crowdfunding investor population really looks like and how it is evolving, another research area that they will be investigating is how investors on the platforms understand the risks involved, as well as how they use the information provided to them by fundraisers. In addition, their research will look at the types of investments crowdfunding platforms are competing with for investors’ money, plus how these platforms and investors share the burden of due diligence and whether an expectation gap exists between the two.

 

Santander UK Strikes a Partnership With an Alternative Finance Company

Santander

Santander UK has struck a partnership with an alternative finance company to fund social enterprises in a deal that marks the first tie-up between a large British high-street bank and a crowdfunding site. (FT.com,October 2016)

The banking giant is joining forces with Crowdfunder to provide £200,000 to community projects, charities and enterprises that are focused on social change across the country.

The bank will donate half the funding target of a project once it raises 50 per cent from the public online.

This headline has gained attention because the partnership further closes the gap between mainstream and alternative finance, it also paves the way for closer collaboration between a well known high-street lender and the crowdfunding sector.

Back 2014, Santander UK paired up with Funding Circle referred small business customers looking for loans to the P2P lender when the bank was unable to serve them.

However, the deal with Crowdfunder is different because equity crowdfunding involves raising money from the public who each gain a share in the company.

Managing director of Santander Business Banking, Sue Douthwaite, told the FT : “Our purpose is to help people and businesses prosper and we recognise the important role social enterprises and charities play in helping communities to thrive.

“With the power of the crowd, our £200,000 Changemaker Fund will help bring great ideas to life and enable social enterprises and community ventures to grow.”

Image source : FT.com

Africa : Has Crowdfunding Potential but Regulatory Laws need to Catch Up

Africa Crowdfunding

Last year crowdfunding platforms in Africa raised $32.3 million for various projects, data from the Afrikstart Crowdfunding in Africa report reveals. However, that figure could be much higher over the coming years if governments across the continent developed crowdfunding regulations.

As Nigerian journalist Yomi Kazeem mentions in his article for QZ.com, despite its rising popularity, the most common limitation of crowdfunding across most African countries, is a lack of legal and regulatory framework.

The Afrikstart Crowdfunding in Africa report states : “The absence of regulation limits the expansion of equity-based or debt-based crowdfunding platforms in Africa.”

Therefore, having a lack of regulation in place is likely to deter investors from using online platforms as there is no investor protection in place.

However, despite having regulation limitations, with cost of access to internet dropping in parts of Africa and smartphone penetration deepening, on the plus side, more Africans are taking advantage of crowdfunding platforms to finance projects ranging from start-ups to social causes.

South Africa comes out on top when it comes to crowdfunding, The Rainbow Nation’s platforms have raised $30.8 million, it’s worth noting that $32.3 million was raised by crowdfunding platforms from all over Africa, so it just goes to show how well South Africa is championing the concept.

The country’s dominance in crowdfunding on the continent is not accidental. According to a report, the popularity of crowdfunding in South Africa is down to the country’s “sophisticated business market, a robust and reliable regulatory credit system and supervision.”

Although not 100% perfect, other African countries can learn a lot from South Africa and adopt a more robust crowdfunding strategy.

 

Restaurant Chain “M” Secures £1.2M Just Hours After Seedrs Campaign Debut

M Crowdfunding

Just hours after restaurant chain M launched its equity crowdfunding campaign on Seedrs, the London-based company has successfully secured £1.2 million out of its £1.3 million funding goal. (Crowdfund Insider, October 2016)

Since its launch back in 2014, the chain has received numerous awards such as : Best Use of Technology The Cateys 2016, Best Young Chef UK & Ireland 2016, San Pellegrino Awards, Best for Steak and Seafood, and many more.

For those that invested in the campaign, starting with the investors that put £10k into the campaign, they will receive 25% discount at M until January 2019, a copy of Executive Chef Michael Reid’s M: a 24- Hour Cookbook, free membership of M DEN, our luxury private members lounge plus, 15% off online wine purchases.

The investors that put in between £1,000 – £9,999 will receive a 15% discount at M until January 2019, a copy of Executive Chef Michael Reid’s M: a 24- Hour Cookbook and free membership of M DEN,  their luxury private members lounge.

Lastly, those who invested between £200- £999 get 0% discount at M until January 2019 and a copy of Executive Chef Michael Reid’s M: a 24- Hour Cookbook.

You can read more about the crowdfunding campaign here.

Image source : Crowdfund Insider

Crowdfunding The Great Wall of China

great wall of china crowdfunding

Heritage officials have launched a crowdfunding campaign to help pay for restoration work on the Great Wall of China.

China Radio International has reported that more than 16,000 people have donated online since the campaign started at the end of August, raising almost 300,000 yuan ($45,000; £34,000) so far (stats taken from last month).

Dong Yaohui, who’s in charge of the fundraising effort, mentioned on the BBC website : “By pooling the contribution of every single individual, however small it is, we will be able to form a great wall to protect the Great Wall.”

The funds made will go towards restoring the Xifengkou section, which runs through a reservoir, and all of the project spending will be made public.

 

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.

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Property News Round-up 22/9/16

Property News All The Latest Updates

 

Hi guys and welcome to our September property news round-up. As usual, we will be taking a look at the latest goings-on in the UK property market with five short stories. Today, we start our property news round-up by looking at the new housing minister’s views on ‘build to rent’ to focusing on the amount of rent that millennials will spend before they are 30. Missed our previous blog entries? If so, feel free to catch up here.

New Housing Minister Backs Build To Rent

2988469720_f9b56a87a5_o

Housing minister Gavin Barwell backed the build to rent sector in his first speech since being appointed.

His first speech took place at Property Week’s RESI 2016 conference in Newport and a key takeaway was Mr. Barwell stressing to delegates that there is a need to build more homes of every single type and not focus on one single tenure.

Barwell, who is also the minister for London, said that a growing number of people and families are now preferring to rent, so the build to rent sector will therefore play an important role in providing for changing attitudes.

The recently elected housing minister concluded that in the UK we need to have a thriving private rented sector in place.

He praised Essential Living’s Vantage Point scheme in Archway, north London, the office conversion which has 118 homes has opened for lettings. The housing minister said this was a much needed start for the sector.

 

Manchester Property Prices Continued To Grow in August

Manchester Property

Reeds Rains and Your Move, released their monthly house price index a few weeks ago, and recorded an increase in both prices and transactions for August.

According to their research, the average house price in the north west had risen to £178,423, up from £178,089 in July.

Other commentators mentioned that the UK housing market is settling down from June’s Brexit vote and confidence has emerged from the Bank of England cutting interest rates.

Transactions across the country were also up, rising by 2.6 pc on the previous month, with over 70,000 sales going through.

 

Manchester and Liverpool Join Forces For Global Property Expo

Liverpool Property

Manchester and Liverpool will join forces to sell the region to a global audience of investors in October.

Both will send a combined delegation to London for MIPIM UK (the UK’s largest property and investment expo).

Filippo Rean, director of MIPIM UK organiser Reed MIDEM’s real estate division told the Liverpool Echo : Manchester, Liverpool and Leeds provide incredible investment opportunities and their presence at MIPIM UK will provide investors with a unique opportunity to see what these northern giants have to offer.

Mr. Rean added : “As the largest event for real estate in the country, we offer incredible opportunities for investors, developers and representatives from city regions across the UK.”

 

UK Property Remains The Highest Yielding Investment

Property Money

Despite the uncertainties of the Brexit vote, investors are choosing to invest in property, including investing in sectors such build to rent.

So why have these investors chosen property? The main reason is that they can outperform the likes of government bonds and stocks and shares.

There are still quite a few investors out there who remain very cautious about the ramifications of life outside of the European Union, however, there are many investors out there who feel confident that investing property in the current climate is an opportunity.

Quite a few European based investors have now started to take an interest due to the fall of the pound. The North West in particular has become even more attractive because of this reason, and investors are hungry to invest into a very appetising region.

If this is a topic that interests you we recommend reading our “Is Property Investment Really Better Than Pensions?” blog post and also “Why The UK Rental Market Is Surging“.

 

Millennials Will Spend £53,000 on Rent Before Age of 30

Millennials

A combination of falling homeownership levels and the rising cost of renting meant that people born between 1981 and 2000 would pay £53,000 in rent before their 30th birthday (Guardian, July 2016)

The Resolution Foundation mentioned in The Guardian article that this country’s housing crisis is one of the most visible examples of inequality between the generations.

Our very own research from last October found that a quarter of under 30’s say they need someone to die before they can afford to buy a property.

In addition, 36% of those surveyed said they felt they’d have to rent forever.

So while young people are spending more of their hard earned income on rent and finding it harder to save for a deposit, the baby boomer generation are the most likely to be landlords and benefit from the strong rental market, according to The Resolution Foundation.

However, it has been highlighted that the older generations are just as concerned about Generation Y’s struggle to own their home, and support for housebuilding is growing across a variety of age groups.

View our Property Investments

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. 

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The Latest P2P News – 16/9/16

P2P News – All The Latest Updates

 

Hi guys and welcome to another P2P news round-up, as usual we will be giving you a snapshot of the latest goings-on in the P2P world. Today we look at an array of news items from there is no evidence of P2P investors underestimating risk to focusing on what the P2P and marketplace lending industry needs to do to go mainstream. Missed our last P2P news round-up? If so, catch up here.

No evidence of P2P Investors Underestimating Risk

P2P Lending

Last month, former FCA chief executive, Tracey McDermott, voiced concerns about the rapid growth of the P2P marketplace that could potentially leave some investors unaware of the risks.

However, the P2PFA’s (Peer-to-Peer Finance Association) director Robert Pettigrew, stressed that this was not the case.

Mr. Pettigrew recently mentioned that although approaches varied depending on the company, the P2PFA was dedicated to ensure investors were aware of all the risks involved.

In addition, he stated : “Different platforms have adopted a variety of approaches to ensure a high level of consumer understanding, but with continued grow and expansion in the sector, the focus on making sure that all investors have an awareness and understanding of the risks of peer-to-peer finance products will continue to be a major priority for P2PFA platforms.” (Bridging & Commercial, September 2016)

Platforms such as LendingCrowd and LandBay recommend that investors should require financial advice if they are unsure about the investing process.

Stock Market VS Peer-to-Peer Lending Investments – Who Wins?

stock market p2p

To buy stock, or not to buy stock that is the question! With recent markets in a volatile state you might want to look for an alternative.

Anyone who is an active stock market investor knows that it takes time to do your research (and a bit of guess work) to figure out where the market(s) are heading.

However, if you’re looking for something that’s less time consuming and slightly more effective – P2P might be for you. There are many platforms out there that are free to pick through the loans that are listed by prospective borrowers and read their stories and explanations of why they need a loan for and what they’ll do with it.

You should review the prospectus of your chosen P2P lending platform before investing as well as spreading the risk of your investment.

With any investment there is always risk involved, however, many view P2P is an alternative, especially with the current volatility of the markets. Anyone looking to diversify their investment and move away from traditional investment options might want to go down the P2P route.

Interested in P2P? If so, why not take a look at our P2P page where you can view investments and order a free information pack.

Brexit Vote Scares Investors Away From Traditional Asset Classes

Brexit P2P

New research suggests that the UK’s Brexit vote is putting investors off traditional asset classes.

Research revealed that 13 per cent of active investors said they have steered clear of currency markets since the EU vote back in late June, in addition, 10 per cent have avoided government bonds and nine per cent have u-turned from investing in equities.

Leicestershire based P2P lender ThinCats told City A.M. that 30 per cent of investors – from a survey of 2,000, including 500 defined as active investors have been put off traditional asset classes.

However, the research showed that assets such as gold has become more attractive, 14 per cent of investors stated that they have turned to the commodity as an alternative. Moreover, 7 per cent, said they view P2P as more attractive after the Brexit vote.

What P2P and Marketplace lending Industry Needs To Do To Go Mainstream

imgp2p

A lack of transparency is one of the key obstacles for p2p and marketplace lending platforms experiencing considerable growth in scale, according to ThinCats’ John Mould, who believes there are several other hurdles the industry needs to overcome to fit into the mainstream investment universe. (Altfi, September 2016)

It’s fair to say that 2016 has been a challenging year for the industry which has seen high profile scandals as well as seeing slow growth.

ThinCats’ CEO told Altfi that he believes the broader industry should deal with several issues centring on greater transparency in returns, what investors are exposed to and securitisation. Mr. Mould says that many platforms are really asset management firms in disguise and should therefore be regulated as such.

Areas where Mould stresses investors and borrowers need greater transparency is in provision funds, collective pools of cash liquidity that act as a type of insurance for investors.

In the Altfi article he also questions the lack of clarity that is linked to retail and institutional investors. He stresses that the issue is that we are not quite sure how they are both treated fairly. We know in a fund that they all come at the same unit price, he mentions, but he questions on who makes the decision process on the loans?

He again questions the lack of clarity in the last paragraph of the article : “If you’re the regulator you’re saying half of them look like fund managers, half of them look like banks but worse and half of them have these provision funds that we don’t know how they work and half of them just seem to be securitising debt. How does that work?”.

 

 

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 Information

The Latest Crowdfunding News – 12/9/16

The Latest Crowdfunding News

Hi guys and welcome to our first September crowdfunding news edition. 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 Kickstarter who have headed east and launched in Asia to looking at how European alternative finance performed in 2015. Missed our recent round-ups? If so, catch up here.

Kickstarter Launches in Asia

Kickstarter Asia

Kickstarter, one of the most well known crowdfunding sites has launched in both Hong Kong and Singapore respectively, and are their first ever sites in the continent.

Prior to launching in Asia, Kickstarter only operated in Europe, North America, and Australia.

In the past, entrepreneurs from Singapore and Hong Kong had to co-operate with overseas partners if they wanted their ideas published on the site.

With the crowdfunding giant now launching in Hong Kong and Singapore, people can present their projects from a local network as well have their fundraising goals set in Hong Kong/Singapore dollars.

Kickstarter will now compete with local sites such as FringeBacker from Hong Kong as well as the likes of OurCrowd and MoolahSense from Singapore.

Just like other crowdfunding sites, Kickstarter gains a cut from each project that has been pledged by its backers.

Well known Kickstarter projects include the Oculus Rift, which received its first funding via Kickstarter back in 2012 to the Pebble smartwatch.

Image Source : BBC News

Finnish Crowdfunding Act Updated

Finland Crowdfunding

From Asia to now travelling to Scandinavia! A few days ago in Finland, the government updated its crowdfunding act, the new legislation makes it easier to register, for example, until now, equity crowdfunding in the Scandinavian country has required an investment firm license from the Finnish Financial Supervisory Authority (FIN-FSA). However, the license slowed the market entry for new players.

Registration is a considerably more affordable alternative to the investment firm license, and this therefore allows new players into the market.

Investor protection is still at a good level under the new act, despite the fact that the registration process is a lighter form of regulation than a license.

In addition, the new Finnish crowdfunding act does not cover rewards or donations based crowdfunding models. For example, rewards-based models that are used by the likes of Kickstarter fall under consumer protection acts. In contrast, donation based crowdfunding in Finland is legal, anyone who wishes to create a donation based campaign must obtain a special fundraising permit from the police.

To sum it up briefly, Whilst the overall market size of alternative finance in Finland is relatively small, the government and industry bodies are hopeful that a balanced regulatory approach will help boost the up and coming sector.

Native equity crowdfunding company Invesdor’s CEO Lasse Mäkelä recently told Crowdfund Insider that the new Act should increase growth of the Finnish crowdfunding market. He stated :
“On a European level, crowdfunding volume is expected to double this year. We believe that with the new legislation Finland will be able to reach similar numbers.”

Crowdfunding in a tub! A brief insight into Oppo Ice Cream

Oppo Crowdfunding

At The House Crowd we love a good crowdfunding story and thought this was worth a mention (especially if you love ice cream!).
Back in 2015 Oppo Ice Cream at the time, was the most the “most overfunded” offer ever on Seedrs.

The London based company had originally set out to gain £150,000, however, they received triple the specified amount. Earlier this year they was again returned for further funding via Seedrs and smashed their £150,000 in just six hours!

Just like us, they too went on Dragon’s Den, they might not of had much of a slaying as what Frazer experienced, but again just like us being on the show helped propel their product.

Although they came out of the den empty handed, they revealed that they had no intention of taking The Dragon’s money as they had already funded the business by offering shares to their fans which they felt was a much better way of growing their brand. Going on the show for them was about spreading their message to the British public that you can indeed indulge in luxury ice cream… without looking like you have.

As we know, gaining business success is not a walk in the park, and it is something that takes hard work to cultivate. Oppo is also a great example of a small company that leveraged investment crowdfunding to take their business and product to the next level and a tasty investment it turned out to be!

Image source : Crowdfund Insider

FCA Calls for Input on Equity Crowdfunding Regulation

Crowdfunding FCA

Upon releasing the new rules in 2014, the FCA promised a post-implementation review of the crowdfunding market and regulatory framework in 2016 (the “Review”). (Lexology, August 2016)

The financial body has released a ‘Call for input’ which describes the results of their initial market research and sets out a number of questions. The questions are linked to a range of areas and the document contains some hints on the future direction of investment based crowdfunding regulation.

Firstly, one key area that they will be taken into consideration is due diligence. Current regulations do not set a minimum standard of due diligence, the regulations cite concerns relating to financial crime and stresses the importance of protecting the interests of investors. They therefore suggest that minimum standards may be introduced.

Secondly, they’ll take client assessment into consideration. The regulator wants to review the extent to which firms are meeting these requirements and whether clients are sufficiently informed to understand the risks that are involved. In addition, they may consider publishing further advice on how to ensure retail investors meet certain criteria as well as introduce sanctions for companies who do not abide by the rules.

Lastly, the FCA will be looking at disclosure. As Lexology mention in a recent blog article, equity crowdfunding platforms are required to provide potential investors with sufficient information so that they are reasonably able to understand the nature of the product and its risks.The Review will look at whether this high-level rule is sufficient to protect investors.

So what happens now? There are currently no proposals to change the regulatory framework for crowdfunding platforms. However, anyone with an interest in equity (or loan-based) crowdfunding has to submit their response to the FCA before 8 September 2016. The feedback will then be used to inform the FCA’s continuing review of the current market. After the Reviewing process, the financial regulator will consider publishing a new consultation document which will include any proposed rule changes.

 

European Alternative Finance Jumps to €5.4 billion in 2015

Europe Alternative Finance

One news story in particular that we stumbled across this week and everyone in the alternative finance community was talking about was Europe.

A report published by the Cambridge Centre for Alternative Finance (CCAF) entitled “Sustaining Momentum“, looks at the rapid growth of alternative finance across Europe.

In a nutshell, the CCAF reports on the ongoing growth of alternative finance including peer to peer lending, crowdfunding and more. Their findings show that alternative finance jumped 92% year over year to €5.4 billion in 2015.

In addition their research revealed that the UK continues to dominate the continent at €4.4 billion in aggregate funding. France and Germany are second and third with €319 million and €249 million respectively. The Dutch also performed well with €111 million. If you remove the UK out of the picture, European alternative finance increased by 72% year over year going from €594 million in 2014 to €1.019 billion in 2015. While the overall rate of growth slowed, the industry is gaining momentum as new regulations from across the continent take place as well as an array of platforms start to mature.

Interested in the CCAF’s research? If so, read their research embedded below.

CCAF Europe 2016 Sustaining Momentum – Final by CrowdfundInsider on Scribd

 

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.

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