The Dire Housing Crisis Needs The Help of Property Crowdfunding

The Dire Housing Crisis Needs The Help of Property Crowdfunding

The housing crisis in the UK doesn’t just restrict our ability to provide the much-needed homes the country’s population needs. It’s also, according to Katja Hall, the Deputy Director-General of CBI, costing UK households £4bn a year.

Of this figure, £3.2bn is down to increased housing costs, and the remaining £770m is due to higher transport costs, as inability to live near work drives more people to commute expensive distances from work. This is, of course, exacerbated by soaring fuel prices and train fares.

Housing shortages are also pushing up market rent at a time when, for the majority of households, disposable income remains weak.  The high cost of moving home and lack of decent and affordable housing also deprives businesses of the flexible and mobile workforce necessary for them to grow and thrive. In short, people and businesses are paying the price for our lack of new homes.

We know that we need to double the number of new homes we provide every year to meet demand, and have been falling shockingly short for years.

House Builders’ Hands Are Tied

Combined with difficulty accessing available land for building on, despite only 10% of the UK’s land being developed, access to finance continues to pose a major barrier for small and medium sized house builders, further exacerbating the housing crisis. The government needs to focus its spending on capital investment in housing stock, but house builders also need access to alternative forms of finance in order to make a dent in the provision of new housing.

Secured peer-to-peer lending to house builders offers a marked solution to the problem. Provided house builders can secure planning permission, access to finance through the property crowdfunding industry has the potential to keep house builders afloat, whilst simultaneously assisting with the provision of these desperately needed new homes.

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Property Developers Need Finance

Along with the problem of providing new builds, there are also an estimated 650,000 empty properties in the UK, over 200,000 of which have been left empty for over six months. Whilst house builders take care of the situation of building new accommodation altogether, there is also much scope for developers.

Many of the empty homes in the UK require significant renovation, and one of the barriers for developers who would do so is the un-mortgageability of these properties. Properties come up for sale by auction all the time, but without ready access to funding, there is no way for most people to take up the investment.

Bridging finance, again offered within the property crowdfunding model, can tide investors over so that they may make those time-sensitive investments. Peer-to-peer funding for renovation work also opens the doors to small and medium-sized property developers to work their magic and provide modern, high-quality homes.

Equally, straight-up crowdfunded investment projects do the same job of bringing high-quality housing to market.

The Government’s See-Saw Success

Government investment in build-to-rent is promising, with a £45m cash injection for 2,000 new homes in the North being announced late in 2016. However, optimistic news back in October of government promises for 225,000 new homes by 2020 was shadowed by the mention that only 15,000 of these would be ready for habitation by then.

Realising their inability to cope with the housing crisis themselves, the government has recognised the solution that the property crowdfunding industry is offering to the crisis, and has provided significant investment in the model.

We are confident that the property crowdfunding industry will be instrumental in helping to alleviate at least some of the problems with UK housing stock, whilst also offering an alternative investment option for those seeking to invest in the property market themselves.

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May keeps up it’s bullish reputation

This spring season has seen a national property average price rise of 3.6%, nearly a whopping £10,000, pushing the national average up to a record high of £272,003, said to be caused by the combination of the Easter and May bank holidays causing a lull in the number of properties coming to market at a time of high demand.

Whilst demand for housing remains strong (up by nearly 20% for Rightmove enquiries so far for 2014), the supply of new properties just can’t keep up. Early 2014 appeared to be a tease, fondling with an increase in new sellers.

Annually, the rate of increase is now 8.9% (the highest rise since October 2007 when it stood at 10.4%), yet whilst the housing market momentum is recovering, London is still letting the team down. New seller asking price in the big streets of London is up by 16.3% compared to an average of 4.9% in the rest of small town England and Wales. Translation? 2014 asking prices are up by around £4,405 per week in London whilst the weekly average for the rest of us is £1,521.

Indeed, outside London and its commuter belt, demand may be better balanced with supply by the more stringent checks and affordability tests under the Mortgage Market Review (MMR) that became mandatory less than a month ago. The main conclusion at present is that the delays in lenders’ processing systems are curtailing lending, with it being too early to comment whether mainstream buyer activity will have a significant drop-off from the new controls.

Where a major imbalance exists between supply and demand the long-term solution has to be to create more housing supply to meet any structural need rather than to artificially hold down demand. But with Spring over and the summer fast approaching, the lull in the market can only get better! This is where we come in! Here at The House Crowd, we believe Investors should “crowd” together, each providing a small amount of the money needed to purchase a suitable investment property at a good price,  typically an empty or run down property where we can add value through refurbishment. This in turn improves the supply of the housing market, creating fair value for money.

For full info on successful property investment click here; http://thehousecrowd.com/thehousecrowd/property-investments/

Let ‘Us’ Do The Property Investment Work For You

If you’re considering entering the buy-to-let property investment  market for the first time, and taking on the title of ‘landlord’ there is a raft of things you need to consider before jumping in; the property price, the structure of the building and the amount of rooms, to name but a few, however one not to be ignored is location. Kirsty and Phil have a point – location is everything!

The location can make a real difference to your rental return; new landlords may find that tenancy agreements are signed quicker if they can attract tenants to a region where there are plenty of opportunities. Consider facilities, such as transport links, shops, gyms and cinemas, not forgetting institutions such as hospitals, a university campus or a really good school down the road.

Here at The House Crowd, we do the homework for you, taking the hassle out of property investment and the burden of being a landlord, by finding great investment properties, in areas of good rental demand that produce high property investment net yields.  We then add value  through refurbishing empty properties therefore breathing new life into them and then selling them on.

Our unique crowdfunding model, opens property investment to the masses, by using just a small amount of capital. So if you’re weighing up the options and considering becoming a landlord, why not invest in The House Crowd and let us carry the weight of property investment on our  shoulders rather than yours.

The House Crowd is a brand new concept in property investment which allows people to invest small amounts via crowdfunding (for more information on the process, visit www.http://thehousecrowd.com/thehousecrowd//how-it-works/). We are committed to breathing life into empty, rundown properties whilst giving investors great returns on their investments (for more information about us, visit www.http://thehousecrowd.com/thehousecrowd//about/our-manifesto/). If you’ve read enough and want to invest now, visit www.http://thehousecrowd.com/thehousecrowd//invest-in-property/)

Is the Government listening?

Okay, we have known for years that not enough new homes are being built. Increased demand and shortage of supply will  inevitably drive the affordability of housing out of the reach of many and create a huge problem. But what about making more use of the housing that we already have as opposed to building new homes?

(http://www.guardian.co.uk/society/2012/may/17/government-failing-homes-built?CMP=twt_gu)

We have a plethora of empty run down properties that have to be considered when we discuss this housing shortage – over 750,000 empty properties last time I read a report on it.  Surely we can look at incentivising further the investing in repossessed properties, bringing them back to life as opposed to just thinking about building expensive new ones.

At The House Crowd, our ethos is to make money for our investors; however,  we are also proud of the fact that we breathe new life into properties that others have left to rot.  Our methodology is a win/win for everyone, we allow people to make great returns from investing in property (from as little as £1,000) and in doing so provide a home that otherwise wouldn’t exist for a tenant or first time buyer.

By the way we are well under way to renovating HCP 003 and have offers accepted on HCP004. House Crowd Project 005 will be launching tomorow

If interested in joining us and making a great profit whilst breathing life into distressed property please join us here: http://thehousecrowd.com/thehousecrowd/invest-in-property/)