Interest rates have been kept at a historic low of 0.5% for more than seven years now, and there’s no sign of this changing any time soon. And even though this base rate has been fixed since 2009, banks are continuing to reduce savings account interest rates.
Data compiled by Moneyfacts within their UK Savings Trends report, found that there were 883 rate cuts between November 2015 and June 2016 alone. Furthermore, 34% of the 86 providers to offer fixed rate bonds made reductions during May 2016, as did the 48 providers of fixed cash ISAs.
Bleak Times for Savings Accounts
Gone are the heady pre-financial crisis days when the average one-year fixed rate bond was 6.15% (in October 2007). A £50,000 pot would return over £3,000 in those days… but by March 2009, the gross return had fallen to just £1,350 on the same amount.
In March this year, things looked even bleaker. The average one-year fixed bond was 1.05% – taking that gross annual interest on £50,000 right down to £525.
And, in a final kick to the stomach for savers, even National Savings & Investments, previously known for their market-leading rates which drew in floods of eager applicants, dropped interest rates for more than a million customers’ savings accounts.
There’s even speculation afoot that further cuts to interest rates are being considered by the Bank of England. This could push them into the negative… resulting in banks and building societies actually charging savers to keep their money.
With such grey times for savers, it’s time to heed some warnings: relying on savings accounts may not just be unprofitable – it may actually damage your future.
One in four UK workers are already saying that low interest rates mean they expect to now have to work past the age of 65, according to Canada Life Group Insurance research. If you need your capital to grow by a certain amount, low interest rates could seriously damage its ability to do so.
It’s vital that the interest you’re earning on those savings keeps pace with inflation over the years: if it doesn’t, your savings will lose buying power.
Mark Carney, governor of the Bank of England, has warned that those 5% base rates are the stuff of history. Even when rates do start to rise once more, he reckons they will stick at around 2.5%. So what does this mean? Are savings accounts dead in the water?
Well, no. Not exactly. Savings accounts are still the best place to store money in case of emergencies, or what’s needed at short notice. They’re great if you can’t, or aren’t prepared to, put your capital at risk. There’s also the benefit of guarantees: the FSCS (Financial Services Compensation Scheme) will protect up to £75,000 of your money per financial institution in case of it going out of business. Then there’s the guaranteed level of interest for a specific term offered by many savings products… albeit a decidedly low rate.
The problem is just that they’re not really any good to rely on to meet your long term savings goals anymore.
So what can you do?
If you’re prepared to take a long term view of your financial future, you can make alternative choices. A financial advisor might be a good idea, and provide you with expert recommendations for putting your savings to work for you. Or you may choose to investigate some of the secured peer to peer lending options now available that cut out the banks and enable you to lend directly to property owners with the loan secured against the borrower’s property. There are risks involved and you may lose some or all your capital, but there is usually a cushion of at least 25% of the property’s value (i.e. the loan is for up to 75% of the property’s value) in place to protect lenders in the event that the property has to be sold for lenders to recover their capital.
So investment is perhaps one of the better options now, particularly if you do not need instant access to your money. Nonetheless, there is risk associated with investment: your capital could go down in value, and there aren’t those guarantees that you’d get by sticking with a savings account. But if you can weather that risk, the potentially higher returns could make a real difference to your chances of meeting your long term financial goals.
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 termswhich 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:
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:
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!
Peer to peer lending is a fairly new kid on the block, but one that’s making its presence clearly known. The idea behind peer to peer lending is that individuals provide unsecured loans to those looking for finance, a move that has tempting advantages (ROI-wise) on traditional bank or building society savings accounts. The P2P industry is growing at a rapid rate, driven by the awkward difficulties of obtaining loans from banks these days, as well as the general loss of faith in the established banking industry since the 2008 crash.
Whilst, of course, not without risk, peer to peer lending has some real advantages to offer. With peer to peer secured loans through The House Crowd, short term investments with a fixed return give investors the confidence of knowing what to expect. That’s not to say, however, that you can just rush into P2P lending willy-nilly. You do need to know what you’re doing in order to make the right kind of investments for your needs.
That’s why we’ve put together these handy tips, to help you on your way to getting started with peer to peer investments in a smart and informed way!
Any financial advisor you speak to will tell you how important it is to have a fully diverse portfolio of investments. The same goes for peer-to-peer lending.
We recommend spreading your risk by ensuring you don’t lend out any more than 1% of your portfolio to one single business. With peer-to-peer lending, you should further diversify by spreading investments across multiple platforms.
This is good advice when it comes to maximising return, and giving you the perspective to ascertain which loans are generating the best yields. Furthermore, if one platform you’re using suddenly experiences issues, or – worse still – vanishes altogether, then by having spread your risk across multiple peer to peer lending platforms, you’ll be in a far less vulnerable position.
The more you diversify, the less likely you’ll be to lose money on your investment.
Knowledge is power, and when it concerns your financial investments, it’s no less than crucial. There’s also no excuse for not being well-informed, especially when there is so much information out there on the web.
Read the reviews on each platform you consider before getting involved. Examine the track records of various platforms, get advice from other investors, keep notes, and compare and contrast before you dive in. It’s important to remember that not all lending platforms are the same, and each have their own practices, and procedures for screening borrowers, as well as handling late payments and defaults.
Here are some handy questions you might like to ask yourself:
What percentage of loans on this platform fall into default?
How are borrowers screened and evaluated?
What average returns have investors produced in the past?
What is the process for handling late payments?
The better informed you are, the more confident you’ll feel, and the more equipped you’ll be to make the right decisions for your money.
Don’t simply allow your returns to sit idle within the platform. This is a good way to lose out on potential income and lower your return on investment: uninvested cash earns no interest. Take advantage of the compounding yields to be gained by continual reinvestment of returns into new loans.
The peer-to-peer lending market is growing and evolving all the time. As such, it’s key to stay up to date with developments within the industry. Acquaint yourself with new platforms as they emerge, changes to legislation and about the loans themselves.
Remember that peer to peer lending is not a passive exercise. You need to put the time in, in order to get anything out.
Some of the loans you’ve already made could be downgraded or even default, and you need to be fully aware whenever something like this happens. Keep abreast of new loan offers as they come up. Again, knowledge is power… a fact we cannot emphasise enough.
Take it Slow
If you’re just starting out with P2P lending, don’t rush in. Do all that reading and research, but remember that the best way to learn is to actually begin. Start with smaller amounts, tentatively monitoring how these small investments perform. This will act as a kind of practice run, and give you the chance to understand the lending platform you’re using.
As with anything in life, taking on too much too soon is likely to leave you feeling overwhelmed, and leave you prone to making mistakes, which could be costly.
Know Your Risk Tolerance
We all have one. So, what’s yours?
Higher risk tends to equate to higher reward, but if you’re not comfortable with that level of risk, take a step back to a risk profile that fits your tolerance better. It’s important to carefully consider how much risk you’re prepared to take, and only invest accordingly.
A strong emergency fund is absolutely vital in order to cover your own personal expenses. Your investment funds should be comprised only of any money you have that is surplus to your daily needs and your emergency fund. Remember that you will not be able to withdraw money from your P2P platform on a whim.
These are just some of the most important factors to consider before you get cracking with P2P investment. You should, as we’ve said above, keep up to date and well-informed on the industry, and monitor your investments closely. It may feel a bit ‘hands-off’, but investments of this kind are certainly not a passive income source. The more you put in, attention-wise, the more you stand to get out.
You can always find out more about investing with The House Crowd by checking out all our guides and articles right here on our website. And if you’ve still got questions, our team is on hand to help!
Following the financial crisis of 2008, cash savers have been hit hard. Interest rates are at their lowest for 300 years, with no sign of any improvement for years to come. For those reliant on cash savings for a monthly income, things are looking particularly bleak.
In the short term, a deposit account may be a safe haven for your money, but over time, cash saving will almost certainly leave you with a loss, as inflation swallows up the value of the money you’re trying to save.
So what’s the investment answer?
Assuming you have a juicy £100,000 to invest, you do have other options. Divide that sum between what you’ll need short term, whilst locking the rest into medium term investments. Both strategies will go towards providing you with a monthly income.
Global Equity Income funds provide twice the return of cash, and corporate bond funds will generate about 50% more monthly income than cash savings. However, these come with a level of risk due to fluctuations on the stock market. The alternative? Well, crowdfunded property investment, of course!
Whilst there is always risk on investing money anywhere, we remove many of the uncertainties associated with property investment, and offer consistent, predictable returns via simple, transparent investments suitable for all levels of investor.
What’s more, at The House Crowd, we offer rates of return, both equity and P2P, that are extremely attractive. Our crowdfunded property investments typically offer 9.5% gross yields fixed for five years, or 10% or more per annum on our development properties.
Along with offering more potential for profit, and a preferable alternative to seeing your savings fester sadly in a stagnant savings account, our model is inarguably a much more interesting and engaging way to manage your investments. The House Crowd is unique in offering both equity and peer to peer secured lending and a range of investment types and terms. This allows you to diversify whilst holding your portfolio on one, easy to manage, trackable platform.
It’s always a sensible move to get advice from an independent financial advisor before investing. A professional will be able to review your needs to ensure the portfolio you choose is of the best quality to offer you the best returns. However, whichever way you swing it, we’re confident that our crowdfunded property investment strategy is the way forward to seeing your money grow!
Home to the eponymous Golden Triangle, North Cheshire is among the most affluent and, some may say, ostentatious, areas of the North West of England.
It’s fair to say that the pretty countryside towns and villages of North Cheshire have risen to fame over the last few years as a result of their popularity with celebrities, notably footballers. However, beyond the customised Range Rovers and paparazzi, beneath the glitz and glamour, remains a uniquely English charm. It is the natural beauty, as much as the coveted postcodes, that make North Cheshire such a desirable place to live.
Of course, the question we are – as always – seeking to answer, is whether North Cheshire is a good place to invest your money.
There’s no denying that Cheshire is a prime location, whichever way you cut it. Even away from the mansions and gated communities, the housing market here remains buoyant. Developers still view it as a hotspot, not simply because of its reputation, but because of its juxtaposition of achingly beautiful English countryside with the vibrant metropolitan buzz of nearby northern powerhouse, Manchester. Manchester itself is rocketing in popularity, with significant investment into the city’s infrastructure (including substantial development work on Manchester Airport). For a more in-depth look at Manchester’s prowess, check out our guide to investing in Manchester city.
Those who come to live here do so because they know that they are getting the best of both worlds. A place that’s perfect for raising a family or escaping the hustle and bustle of the city, in close proximity to the leading business centres of the UK outside of London.
In this article, we will be looking at a few of the most desirable towns and villages that make up the Golden Triangle, with the aim of helping you decide if investing in North Cheshire is right for you. The ‘Triangle’ is generally considered to consist primarily of Prestbury, Alderley Edge and Wilmslow, with Altrincham, Bowdon and Hale also getting plenty of golden attention. Let’s begin at the top of the Golden Triangle, with footballers’ favourite, Prestbury.
Arguably less ostentatious than nearby Alderley Edge, Prestbury is, nonetheless, home to an impressive list of famous residents.
Of course, there’s Wayne and Coleen Rooney, who’ve been living in their mansion in Prestbury since 2005. There’s Peter Crouch and his model wife Abbey Clancey, who rent a £3 million home in Prestbury. Along with a string of other footballers, Prestbury is also home Freddy Flintoff, former Slade frontman Noddy Holder and comedian Paddy McGuiness.
Yes, it is one of the most sought-after and expensive places to live outside London. But is there any room for property investors to take a slice of Prestbury pie?
Well, the truth is that there isn’t a great deal on the market in Prestbury. Of the twenty properties sold in March 2016, eleven were detached houses averaging just over £800,000 in value. Just one flat was sold, two semi-detached and six terraced properties.
What does this mean? Well, in short, you’ll have to look very closely to get a look-in at anything worth your investment, in an area where the highest proportion of properties on the market are over £1 million. Nonetheless, if you’re able to snap up something on the lower end of the market, it should certainly make a very quick turnaround. In July 2016, terraced properties spent an average of just 38 days on the market, with three bed properties proving good fodder for a quick sale.
A quaint village characterised by lovely Tudor-beamed cottages and a delightful rose coloured stone church, Alderley Edge is, in essence, the epitome of an English rural village. Don’t be fooled by the rows of designer boutiques, florists and delicatessens. Alderley Edge may be WAG-central, but it’s as charming as they come.
As with anywhere, charming does come with a price tag. Take Whitebarn Road, for example, where the average property price is well over the £2 million mark. This is among the highest value streets in Cheshire, and the rest of Alderley Edge isn’t too far off.
And is there a rental market in Alderley Edge? You might think this super posh town was almost exclusively the domain of the owner-occupier, but there are rental properties around. As such, we’ve done our rental market charts for you:
Altrincham’s town website describes its population as being “made up of an exceptionally high number of professionals, captains of industry and homeowners. The prosperity of the town and its inhabitants are such as to make it almost unparalleled outside the south east of England.” Clearly, Altrincham is pretty proud of itself.
As well as being impossibly posh (we’re going to assume you’re getting the picture by now), Altrincham is also a very well appointed town in terms of transport networks to Manchester city, retail, leisure, schools, and – crucially for us – property.
A 2014 report by Halifax claimed that Altrincham residents pay a whopping £2,227 per square metre for their homes. Things certainly haven’t eased off since then, so you can pretty much expect prices to be as high as elsewhere in the Golden Triangle area. Still, it’s not as expensive as London, where (in 2014) a square metre of property weighed in at over £5,000, and in Kensington and Chelsea, over £10,000. Anyway, here are the charts:
A quick word about transport: Altrincham is prime territory for those successful types commuting into the city. Situated on the A56, there is easy road access to Manchester, as well as national motorway routes. Integrated rail, bus and metrolink interchange are designed seamlessly to run into Manchester and direct to its mainline rail stations, which make journeys to London pleasingly straightforward for professionals taking regular trips to the capital. Just fifteen minutes from the centre of town, Manchester Airport is within very easy reach, too.
And here’s those all-important rental market charts:
Hale – (home to The House Crowd HQ) is situated within the borough of Altrincham, and is bounded by Bowdon, Hale Barns and the River Bollin (which flows through most of these towns). About nine miles south west of the city of Manchester, it’s got great transport links via the M6, M56 and M602, as well as the integral public transport networks. Again, it’s ideal territory for commuters.
Though new developments are thin on the ground, the existing properties in Hale are characteristically beautiful. Ignoring the top heavy market, and focusing more on the affordable, there are terraced houses and semis available for prices that parallel those of the south east of England. You can also pick up a luxury penthouse for under £300,000, and there are a selection of retirement flats around, too.
It’s a town that is as – if not more – out of reach for most buyers. However, as the rental market continues to expand and push owner-occupancy rates down, investors could benefit from the promising rental yields to be expected in such an in-demand location.
Very similar to Hale, Wilmslow and the rest, Bowdon also comprises the small village of Dunham Massey (which is owned by the National Trust), Bowdon Vale and Warburton.
It’s home to a relatively small population of just under 9,000, and is a much quieter, more rural-feeling village than some of the others covered in this article. Most of Bowdon is owned by the National Trust, as part of the Dunham Massey Estate, which comprises the stunning Dunham Massey Hall and deer park, which dates back to 1616.
But what of the property market? Here are the charts:
And again, here come the Bowdon rental market charts:
Just three miles from Manchester Airport, and ten miles south of Manchester centre, Wilmslow is yet another North Cheshire town prime for commuters to the city. Home to roughly 30,000 residents, including the obligatory scattering of celebs, there’s little to suggest Wilmslow is anything less than on a par with its neighbouring affluent towns.
That being said, the property market here feels a lot more fluid. There are significantly more flats, terraced properties and semis on the market (as of July 2016), even if the prices are characteristically steep. Rental yields are, however, promising.
…and, once more, the Wilmslow rental market:
The Golden Triangle and satellite villages of North Cheshire are, as we have seen, prime real estate territory. As one of the most desirable locations in the United Kingdom, the area comes with a correspondingly high price tag.
As such, those seeking an opportunity for buy-to-let investment are likely to benefit from decent rental yields across the North Cheshire area. There is no sign of interest dropping off on the owner-occupier front, either. As more professionals flock to Manchester to take advantage of its ever-growing influence on the economy, there will continue to be demand for properties for the most affluent.
So, should you consider investing in North Cheshire? If you can, then it looks promising. As always, we must tell you that nothing is certain, and we cannot guarantee that your investment will pay off. Nonetheless, for those interested in getting involved in the higher end of the market, or taking advantage of opportunities on mid-range properties in the area, things could be very fruitful.
HC Developments – the development arm of The House Crowd – is currently building 4 luxury apartments in a prime position in Alderley Edge and 3 detached houses in Prestbury. We have recently bought another piece of land for 5 large detached houses and are actively seeking more land buying/ development opportunities.
Until recently, the only builders of rental homes for low income tenants were the council, and social landlords.
Previously, those who found themselves ineligible for social housing were reliant on private landlords: low-level buy-to-let investors with accumulated property portfolios, and those simply renting out their former homes. What’s more, for those forced into private rentals with ‘amateur’ landlords, there has long been a real problem of the landlords simply failing to maintain the property, leading to unacceptable living standards for the poorest in the community.
But now, private investors are seeking to bring movement, and higher quality accommodation, to rentals for those at the bottom end of the ladder.
Not For Sale
On a small suburban estate in Salford, private investors have constructed red brick family homes, very much in keeping with thousands that families in the UK buy each year. The only difference with these ones is that they are not for sale. The investors behind them are keeping these houses for the long term.
Taking their example from the thriving rental markets in both the US and Germany, investors are now taking action on the potential of buy-to-let developments as a large scale source of steady income.
A Growing Rental Market
Considering the state of the market at present, these investors seem to have tuned into a space where demand is high. Families, as we know, are finding it increasingly difficult to buy homes in the current climate of rising house prices and a dearth of wage increases.
With mortgages less accessible, and house prices laughably out of reach for many (they’ve risen 7% a year since 1980), the number of owner occupiers in the UK has dropped from 71% in 2003 to just 63% at present.
Whilst critics are warning that renters will remain poorer in the long run, without the asset of a property of their own, this is, nonetheless, an opportunity that has benefits for both parties. Investors are recognising the potential for good rental yields, whilst families in need of decent rental accommodation get their wish.
They may not do better in the long run, without that property asset behind them, but renters living for the ‘now’ find themselves with more disposable income than their owner-occupier peers. With better options open to them, renters will surely enjoy better quality of life, and with that disposable income, benefits to the wider local economy may also be noticeable.
One of the principal investor companies currently operating in this area is Sigma Capital, who have an impressive range of backers behind them. The creation of large, rental estates, where monthly rent also covers tenants’ utility bills and some maintenance (such as a grass cut twice a month), is part of a move to professionalise the rental business.
Countryside Properties works with Sigma as a listed housebuilder, and has so far created over 600 homes of this type, with a further 550 expected for 2017. They are targeting northern cities, such as Salford on the outskirts of the city of Manchester, where local authorities are keen to open doors to new house builds on the large banks of land they own.
The majority of these homes by Sigma are set alongside other houses by Countryside Properties that are available for sale, with all being built to the same design. So there is no distinguishing between the blocks of sale versus rental properties.
Along with all the other benefits of this little housing revolution, another plus is that these new builds will relieve pressure on council house waiting lists. Oldham, for example, currently has over 11,000 people on its list, and only 3,300 of these are eligible for public housing.
But these new developments signal a light at the end of the tunnel. The number of properties emerging (from planning to completion) has more than doubled in the last six months. According to British Property Federation figures, from 21,400 to 57,000. About 30,000 are in London.
Sigma has announced plans to construct a whopping 10,000 rented homes over the next five years, which will leave them with a £1bn portfolio.
It’s not just Sigma leading the market, however. Quintain, a London based developer, has plans for 7,000 rental homes in one single development near Wembley Arena.
Stonegate Developments in Newcastle are building 162 apartments for this purpose, whilst Placefirst, another developer, is in the process of refurbing hundreds of dilapidated homes.
Then, of course, there’s us.
When we started out, back in 2012, it was with the traditional buy to let model, from which we have evolved. We are now proud to be champions of the use of crowdfunding monies to create badly needed new homes, whilst providing excellent returns for investors.
On the investor side, too, we are levelling the playing field, allowing those for whom the idea of a property investment portfolio was once out of reach, to enter the game. Our consistent, predictable returns through simple, transparent investments are suitable for all levels of investor.
Currently, we have over 100 properties being built over 7 developments in the North West, with about 180 more on the cards as we negotiate deals on buying the land. It is a philosophy of creating a more egalitarian property market, where investors can get excellent rates of return, whatever the level at which they operate, whilst tenants in buy-to-let properties get an outstanding home that they can afford.
The work of The House Crowd represents part of the same matrix of philanthropic capitalism behind the work of developers like Sigma and others mentioned in this post. We are working to similar aims: a better future property market for everyone involved. And, particularly for us, with the aim of seeing our beloved Manchester, and its surrounding areas, reach its considerable potential.
Manchester has come of age, and can now proudly boast the title of Capital of the North. It is a city rich in modern cultural vibrance as much as historical heritage; a magnet for the creative, forward-thinking minds of the future. Manchester is a bona fide example of a 21st century city, on course to continue with the exciting growth we’ve seen there in recent years. As such, the Manchester property market is an absolute hotbed of money-making potential.
Another reason to invest in Manchester in particular? By 2050, it is estimated that a staggering half of all households will live in cities. Homes are set to become smaller and smarter, whilst cities – of course – offer the facilities, entertainment and lifestyle options that are simply not available in the suburbs.
So, with all that as an introduction, let’s get stuck into looking deeper about why investing in property in Manchester could be the ideal investment decision.
Regeneration and Investment
There are so many regeneration projects either in progress or on the horizon in central Manchester at present, it’s hard to know where to begin. But we’ll do our best.
Located within a strategically valuable gateway location in south western Manchester city centre, the Cornbrook Hub is situated close to the A56 Bridgewater Way, with good access to Pomona Island (part of the development site), the Bridgewater Canal, and with the Cornbrook Metrolink station central to the site. This Metrolink station is key to the city’s public transport network, and therefore vital to the success of this development area.
Right now, despite its great location, Cornbrook is an underutilised part of the city, occupied by open storage yards and scrap metal merchants. It’s these that are detracting from the massive potential of the area, and making it incompatible with recently regenerated St George’s Island, and new proposals for Pomona Island. In short, there is a huge amount that this area of the city could offer. You can see the full regeneration proposal here.
Nonetheless, all signs point to a strong future for the area, and it’s likely to be a prime location to consider for early investment opportunities. Watch Cornbook closely.
Set within close proximity to the city’s retail hub, near to the Salford city border, the Medieval Quarter is a culturally and historically rich area of the city. Home to both Chetham’s School of Music and Manchester Cathedral, as well as the National Football Museum, new developments within the area are promising.
Not only is the destination itself prime territory, it’s also an ideal route to the main business sector and retail core of the city. Proposed new developments will expand on the green space and tree coverage in the area, and seek to drive the Medieval Quarter’s attractiveness to potential new residents. Find out more about the Medieval Quarter proposals here.
East Manchester, specifically the areas of Ancoats, New Islington, Beswick, Miles Platting, Openshaw, Clayton, Newton Heath and Gorton, has undergone substantial redevelopment in recent years.
It was the part of Manchester most severely affected by the industrial decline of the 1970s, in which over half the area’s manufacturing jobs were lost. House values subsequently plummeted. As a result, the area spent a long time in a state of impoverishment.
Things, however, are now on the up. Huge investment in the creation of family neighbourhoods – involving the construction of over 5,000 new homes, and the improvement of over 6,700 – is now paying off. Three new shopping centres, two new health centres and seven children’s centres have appeared, as well as 1,300 local companies supported by business advisors, and nearly 200,000 square metres of prime commercial floor space has been built.
In the Ancoats area, design-led apartment blocks have been integrated into well thought-out and sustainable neighbourhoods. Though most have been snapped up already, construction is still going on, so it’s worth registering an interest, particularly if the words ‘edgy’ and ‘progressive’ appeal to you.
Similarly, New Islington is worth a mention. Located within Ancoats, Urban Splash (the renowned Manchester property developers) have been behind the creation of this brand new community. They brought in avant garde architect Will Alsop to design the housing stock, which is aimed at families (there’s a lovely, fresh ‘free’ primary school here), both rental and owner-occupier.
As a result, East Manchester is now quickly becoming an area renowned for its business prowess. It shows promise in becoming a significant employment location, with successful companies choosing to locate themselves in the new and thriving area.
90 rental apartments in the Ordsall 11-storey tower block (200 metres from Salford Central station), a mix of cafes, bars and restaurants, outdoor events space and a new public square, form just part of the development.
A further 100 apartments have already been built on the site of the former Vimto factory, and 372 flats within a 15 storey ‘Manhattan-style’ block on Woden Street are in progress. 580 apartments, boutique studios and townhouses are proposed for the £75m Adelphi Wharf scheme. 36 townhouses with rooftop gardens have received planning permission overlooking the river.
All in, over 1,000 new homes, along with hotels, shops, leisure facilities and restaurants are expected in New Bailey. This is estimated to bring 11,000 jobs to the area.
Just as with most aspects of Manchester right now, the city has ambitious plans for the future of its transport networks. There’s a long term vision in place (see video below), but they’re working in five year increments to keep improvements moving constantly into the future.
Greater Manchester’s Transport strategy is focused on devolution of powers and funding from central Government, pushing for greater local determination of policies, funding and delivery. In short, it has big ideas, and wants to be in control of making them happen. That explains why their plans reach forward as far as 2040.
We also investigated the Annual Survey of Hours and Earnings, and found that the median weekly wage for residents of the city of Manchester was £392 in 2015, just shy of the median for the north west as a whole (£401). The median figure for the whole of England in 2015 was £430.
Some more data for you to chew on:
The 2011 census showed Manchester to be the fastest-growing city in the UK, in terms of population
Greater Manchester is home to more multi-millionaires than anywhere outside London, with the highest levels attributed within the City of Manchester itself
Manchester rates 7th in the 2016 mid-year Quality of Life index for Northern Europe, behind Edinburgh (1st), Copenhagen (2nd), Reykjavik (3rd), Helsinki (4th), Stockholm (5th, and Tallinn (6th). London, by comparison, is 12th. It is also ranked 6th in the UK
Manchester is rated second most globally influential city in the UK after London
Research at the University of Manchester is ranked the third most powerful in the UK, behind Cambridge and Oxford
Along with London, Manchester featured in the top 30 cities in the world for investment. Of the top 30, Manchester was 12th for the highest proportion of urban economy derived from financial and business services
We think we’ve made it fairly clear how highly sought-after the City of Manchester is as a residential area. But let’s look a little deeper into what an investment in Manchester property could mean.
The 2011 census tells us that, at that time, 37.8% of households were owner-occupied, and 28.4% were privately rented. Subsequent data suggests that the rental figure has ballooned considerably since 2011, whilst owner-occupancies have decreased. Council and social housing made for 13.5% and 18.1% respectively. Just over 30% resided in terraced properties, though this figure has since decreased.
Data from the Office for National Statistics shows Manchester to have the greatest percentage point increase in proportion of flats sold between Q4 of 1995 to Q2 of 2015. Flats sold in the city have risen from 10.1% in 1995 to 35.6% of all property sales in 2015. This equates to a 25.6% increase.
Looking at the number of properties on the market at present, compared to 2015, we can see that there has been a significant drop-off. There are 27% fewer properties of all types on the market in July 2016 than there were this time last year. Nonetheless, in keeping with the data from the Office for National Statistics, the highest proportion continue to be flats, with 1471 up for sale in July 2016. This equates to 19% fewer than last year.
Of course, where there are fewer properties on the market, demand is high on those that are for sale. From our information, in the period May to July 2016, it seems terraced houses, and one bedroom properties, take the least amount of time to sell. Interestingly, however, when we look at value, it’s the £400,000 to £500,000 bracket that is snatched up quickest.
The Rental Market
When we look at July 2016’s data on the rental market in Manchester, we see that the most popular properties for rent are in the two bedroom category. They fly off the market within an average of 51 days, and there are nearly 2000 on the market at time of writing. Tenant occupancy rates in Manchester are at over 97%.
Why so popular? Well, there are a number of factors at play making rental the primary accommodation option for residents in Manchester. Firstly, the lack of lending for mortgages, and a decline in social housing. Then there is the shifting employment landscape and continuing immigration. Divorce rates are higher than ever, and (completely unrelatedly, of course) people are delaying marriage for longer. Finally, there’s the rise in student numbers.
Demand for high quality, purpose-built student accommodation is higher than ever. Students, it seems, aren’t happy to fester in mould-encrusted digs anymore. We won’t mention anything about millennial entitlement issues here. But the result is that Manchester is providing property that meets the demands of the city’s valuable student population, and with over 80,000 students arriving every year, this is a lucrative market.
What’s more, a large number of students enjoy Manchester so much that they stay on after they’ve graduated, moving up to a house share or city centre apartment as they make the transition from study into the workplace.
In the city centre, in the rental market in particular, the highest demand can be found in those smart, European style open plan apartments and converted warehouses. Even more so, high quality micro-living apartments, and those boasting new techie smart home features. These are the sort of properties young professionals rising up through the economic ranks are after, and the city centre is where they want to make their home.
To Conclude: Should I Invest in Manchester?
Of course, we can’t tell you to invest anywhere. We cannot make assurances, and markets can always drop as much as they can grow. Having said that, however, all signs point to a glittering future for Manchester city centre.
Regeneration is reaching deep into every crevice of Manchester, with billions being invested in the continued growth of this city. Great minds are seeing the sheer potential Manchester has to offer, and for those savvy enough to jump on the right opportunities as they come up, there is a sense of the property market here being ripe for the picking.
Situated 7 miles south east of Manchester City Centre, Stockport has had a bit of a chequered history in terms of its desirability as a place to live. However, things are on the up for this former mill town, with earnest redevelopment plans current in full swing across the town. It’s a busy time, particularly with Manchester’s increasing popularity as the industrial and social epicentre of the North West.
It’s no surprise, really, that Stockport is so determined to stake its claim on the map in light of Manchester’s continuing success, particularly with young professionals, and millennial creatives flocking to the city to work, study, and live the vibrant urban life that Manchester has to offer. It would be nothing less than foolish for Stockport not to be seizing this golden opportunity for fresh blood. And let’s just say, Stockport has been quick off the mark.
The potential impact that the substantial changes and improvements will have on the area should not be underestimated, and – in our opinion – endorses potential growth afforded to the area.
Regeneration and Investment
One of Stockport’s main benefits is that it is ideally situated for commuters travelling into the city to work, with just over 10% doing so at present. With so much going on to develop Stockport itself, we’d be surprised if many weren’t abandoning the city in favour of Stockport town before long.
The council is hard at work creating a town that will attract more residents seeking a place outside the main city, and also on creating an inspiring working atmosphere within Stockport itself. £1bn is being invested by Stockport Council and its partners, into a wide range of projects, both in leisure and retail, and in the commercial sector.
Commercial and Industrial
By the end of 2016, one of the North West’s newest business hubs, the Stockport Exchange, will be completed in Stockport town centre. Set within stunning landscaped public grounds, right beside the mainline railway station, the Exchange will offer 370,000 sq ft of serious prime office space, a 1,000 space car park, and a 115 bedroom hotel. This is just one part of the major commercial development being undertaken in the town.
The new Aurora Stockport industrial estate, just outside the centre of town, has also had £11 million poured into it, in order to transform the 18 acre site into 145,000 square foot of industrial space. It’s estimated that Aurora alone will create hundreds of new jobs in the local area.
Leisure and Retail
The town centre alone is receiving £900 million in investment over the next five years, to include street improvements and ‘Portas’ retail improvements. This, however, appears to be just the tip of the iceberg.
Redrock Stockport, next to Merseyway Shopping Centre, is a £45 million development set to be completed in late 2017, and will include a 10 screen cinema, new public squares and over 38,000 sq.ft. of retail and restaurant space, including an ‘Urban Realm’ with entertainment areas, bars and cafes. Research estimates that the development’s total retail market potential on completion will be around £469 million.
The historical Market Place and Underbanks area of Stockport town centre has also received a hefty investment of £7 million, with the view of creating a hub for independent retailers, restaurants and bars, and workspace for the creative industries.
A large, design-sensitive project is underway to replace existing 1950s social housing with hundreds of newly-built two and three bedroom town houses, which will incorporate the refurbishment of historic properties and buildings within the Lower Hillgate conservation area.
New Housing and Transport Plans
The Council aren’t pulling any punches when it comes to housing and transport. £73 million of investment into town centre access and circulation, and £42 million for a transport interchange prove Stockport isn’t messing around making sure all the new residents and businesses they desire can get around the town with ease.
More residential development is taking place beside the Town Hall in Piccadilly Square. In place of the HR Owen Lamborghini former showroom, the construction of a luxury residential apartment development is in progress.
1,100 new houses are set to be built over the next few years, including new ‘urban villages’ in Covent Garden and Hopes Carr areas of the town. Over 270 new homes will also be springing up in nearby Brinnington.
Oh, and let’s not forget that Manchester International Airport, about 8 miles away, is closer to Stockport than it is to Manchester. The airport, too, is undergoing a £1bn transformation and growth program. Another reason why Stockport is a good call for property: its proximity to the airport makes it a popular housing location for airport workers – especially when the Metrolink is completed.
Just to be clear: investing early in property in Stockport while these regeneration plans are in progress is likely to prove to be a smart move, as major regeneration works like these into the infrastructure and the creation of many new jobs (such as those at Airport City) typically lead to above average increases in property prices.
Culture, Facilities and Education
Apart from being situated in the town’s business district, next to Stockport Courts and the Town Hall, close to Archer House is Stockport College Campus. The town’s main hospital, Stepping Hill, is only approximately 1.8 miles south of the town centre, and many of its staff will choose to live in the town centre close to its amenities and attractions.
Stockport town centre is not without its culture, either! The town is home to the National Hat Museum, and the Staircase House Museum, a beautifully restored 15th century townhouse in the historic Market Place. There’s also the Air Raid Shelters Museum, a WWII museum set deep in the sandstone caves under the town.
The Plaza in Mersey Square has regular live theatre, comedy, dance and music performances, while the Stockport War Memorial Art Gallery as four separate galleries hosting regular exhibitions.
Demographics and Work
According to data gathered by the Stockport Metropolitan Borough Council, in 2016 the total population is 286,800. 62% of these are of working age. Of this figure, 81.5% are ‘economically active’ (i.e. they work) – this is up 2.2% on 2015’s figures, and compares favourably with the UK average of 74.6%.
The Council’s latest figures tell us that 41.4% of the Stockport population are educated to at least NVQ Level 4, and that in 2016, the highest proportion of Stockport’s working population are in Professional roles.
Full time workers who are resident in Stockport were found to be earning a gross median weekly income of £520.10. This is slightly above the UK median of £518.00, though the workplaces situated in Stockport itself pay slightly under the UK median of £518.00, at £495.30.
The Business District of Stockport is one of the largest employment areas of the town, concentrated to the south of the main shopping and retail area around Merseyway. Within the Business District, there are numerous employers occupying large office premises, including insurance companies, banks, local government departments, and the local authority.
To summarise: employment opportunities in the region are consistently healthy, which is why Greater Manchester has more UK millionaires than anywhere else outside of London.
Before we move on to details on property sales and rentals in Stockport, a quick note on marital status. It’s common sense that the marital status of a town’s residents has an impact on the sort of properties on the market, to an extent that parallels income factors. So, just for interest, here are some figures, gathered from the 2011 census:
Stockport Property Market
Stockport is a highly sought-after residential region of Greater Manchester, located on the southern Manchester/north Cheshire border. The town boasts an above-average home ownership rate, as well as strong demand for property and accommodation. As a result, property prices here are higher than average for the area.
The areas of Woodford, Bramhall and Hazel Grove rank among some of the wealthiest in the UK. What’s more, beyond the urban sprawl and close vibrant Manchester city centre, you’ll find miles of beautiful open countryside, from the Pennines to the Cheshire Plain.
Using the most recent data to hand, we can see that the quickest sales in Stockport at present are in the £100,000 to £200,000 bracket, which is little surprise considering that the average house price in Stockport (according to March 2015 data) were around £156,421. Of course, this is likely to have increased over the last year, as the general UK property market has continued to swell during this period.
Nonetheless, this information doesn’t tell us much about what buyers are getting for that price. If, however, we then look at similar data by type of property, as opposed to value, it becomes clear that the quickest movers are in the Detached and Semi-Detached categories, with three beds taking the shortest time to sell.
This is all very well, but if you’re looking to invest in rental property in Stockport, you’re going to want to see a different graph. Well, here you go:
The figures aren’t particularly out of the ordinary, with the highest volume of properties on the market being two bed and taking the shortest period to rent. The rental amount you can expect from Stockport at present is about £100 less than the UK average (excluding London), but within the general ballpark average of the north west. But post-regeneration? This could increase considerably.
To Conclude: Is Stockport Worth Your Investment?
There’s no short answer to this, because any location can see growth or price drops due to factors outside the foreseeable. So, as always, we’re not making any assurances.
However, there are some truly promising signs afoot in Stockport. The regeneration projects into which the town has pooled an optimistic £1bn are sure to bring a lot of interest to the town. Already, large corporate firms are beginning to pay attention.
Just in case you needed a few more examples, commercial lettings company Orbit has invested heavily on its portfolio in the town, modernising its office spaces, offering flexible office space packages, updating technology and broadband connectivity, and even introducing a reward scheme for its customers.
In addition, independent brewers, Robinsons, has invested £12 million in updating its portfolio of pubs, as well as opening a new visitors’ centre and restaurant, and software company CDL has expanded into a shiny new office in the centre of town, creating 50 local jobs.
With so much money pouring into Stockport, now may just be the best time that there has ever been to invest in this long-overlooked northern town.
Are Brits obsessed with owning property? The answer, according tonew data from Eurostat, implies not. The data shows that 64.8% of Brits live in a property they own, compared to an average of 70.1% across the EU. Whilst Danes and Germans are much more inclined towards private rental, just 17.1% of Brits do. To explain the rest of the pie: those who don’t own or rent privately in the UK live in social and council housing.
Considering that house prices have gone up 47,000% over the last 90 years, against a rise of 5,413% in living costs, the financial attractions of buy-to-let (along with the failures of the pensions industry) are obvious. But are things about to change?
Is the buy-to-let industry on its last legs?
Mortgage eligibility changes, combined with action on stamp duty and tax relief, have had quite an impact. Higher rate taxpayers are seeing their returns drop by up to 40%, whilst basic rate landlords suffer a 10% fall in aggregate returns.
Nonetheless, there is optimism. Tony Mudd, of St James’s Place, is confident that “investors’ love of property will survive this”. He added that reasonable returns of 4 to 5% can still be gained, and those buying without a mortgage won’t be affected by restrictions on interest tax deduction.
Even if buy-to-let is waning in attractiveness, residential property is still good news. There’s no sign as yet that enough houses are to be built to meet the UK’s growing demand, so capital values are likely to keep on rising. What’s more, the rise of property tech companies developing new ways of gaining exposure for buy-to-let properties may well take care of some of the issues of this type of investment.
Enter Property Crowdfunding!
Property crowdfunding, for example, is part of this new wave of property technology. Crowdfunding represents another option for investors wishing to take a stake in the rental sector, and to balance off against the risk posed by any investment in property, the crowdfunding avenue does offer some attractive potential benefits.
Firstly, you cut out the hassle of managing a property yourself. No need to deal with tenants, maintenance or any other issues related to being a landlord. Exposure, too, could be significantly cheaper, and there may also be some relative tax benefits.
Whilst the 3% stamp duty surcharge remains, the returns are classed as dividends, which allows you to put them under the new £5,000 annual tax-free dividend allowance. And because the investment is structured within a separate company, you won’t miss out on the lower capital gains tax rates.
The House Crowd, of course, is a key player in the property crowdfunding revolution, even if we do say so ourselves! We are, therefore, more than aware of the benefits on offer by investing in property with us. But you should always remember that where there is investment, there is risk, particularly in the weird waters of the property market. That’s why you have to make it clear to us that you understand those risks completely before we let you invest your money. We love the fact, however, that we’re offering an alternative route, especially at a time when the government seem so determined to crack down on the buy-to-let industry.
Hi guys hope you had a great Easter! This week we return to our fortnightly crowdfunding news updates and rather than clocking up the air miles from travelling to many places to investigate the latest goings-on in crowdfunding, we time travel in our first story back to Saxon England and travel back and end up in France for our last story of the day. If you read our property blog from last week and were wondering how much the ‘fairy tale’ castle in Manchester cost – the answer was B £2.5 million!
Online Crowdfunding Helps Build Saxon House
Our first story of the day comes from Saxon England (ok, modern day Lincolnshire!).
Retired teachers Steve, 64, and Judith Jones, 65, have worked hard for two decades creating a Saxon house in their back garden.
They built the traditional looking Saxon house from green oak wood and used tools and construction methods from the 9th century.
The retired couple now use the Saxon house to teach youngsters from a nearby school for children with learning or behavioural problems. (Express, March, 2016)
In January, Mr and Mrs Jones noticed that the thatched roof was in need of repair – so they turned to 21st century methods and set up an online crowdfunding campaign.
Last weekend the couple from Lincolnshire reached their target meaning the roof can now be re-thatched to stop rain water flooding in to the house.
The Saxon house was finished after four years but they have continued to add to since starting the project back in the mid 90s.
The Jones family live normal 21st century lives in their home but dress up as Saxons when people are visiting them.
Mrs. Jones told the Express : “We were delighted when we reached the target because if was a type of campaign that meant you either got all of the money by a set date or you didn’t get any.”
Her husband Steve mentioned in the Express article that they have made the Saxon house as authentic as it can be and want people to walk in and look see what is in and make sense of how it would have been used and how the Saxons survived.
At The House Crowd unfortunately we can’t help you crowdfund your very own Saxon house – but if you are interested in something more “current” to invest in – why not take a sneak peak out our latest projects? Click here to view.
Angered by the imposition of a new NHS contract, a group of junior doctors took their fight from the picket lines to the internet. (FT, March, 2016)
Dr Nadia Masood, an anaesthetics registrar, and three others wanted a judicial review on the NHS contract but needed money to pay for it. However, within a space of three days Masood and the three others involved raised £85,000 via crowdfunding site CrowdJustice (we blogged about their work back in January – click here to view).
Dr Masood mentioned in The FT : “This contract is a public issue and affects everyone, if we were not able to use crowdfunding we would not be able to do this. We cannot stand by without a proper review of the impact on patient safety of such action.”
As we mention in our “Justice For The Crowd” blog post – (as you can tell!) we love crowdfunding and the whole concept of the crowd coming together for the common good whether that be to invest in start-ups, property, or cases like this, the ability to use crowdfunding by joining forces with like-minded people to try and protect their particular interests is paramount.
If you are in a situation where you need a team of people to pool various resources together and help fund judicial reviews we strongly recommend visiting the Justice For The Crowd site.
Crowdfunding investment platform SyndicateRoomhas gained intermediary status with the London Stock Exchange (LSE), meaning it can offer investors access to initial public offerings (IPOs) of companies listing shares on the London stock market through its online platform. (Business Insider, March, 2016)
Co-founder and CEO Goncalo de Vasconcelos mentioned in Business Insider about IPOs that they are harder to access when there is a discount on the share price and typically only institutional investors such as the likes of asset managers, and wealth managers have access to them.
He also mentions that SyndicateRoom is breaking barriers by letting ordinary investors gain access to the kind of deals that professional investors normally only get involved in.
While the Cambridge based company is the first crowdfunding platform to get intermediary status, other platforms are trying to revamp the crowdfunding model to public markets. For those of you who have a huge interest in crowdfunding, you’ll remember when Seedrs ran what was claimed as “the first-ever crowdfunding campaign for a company’s IPO” last year, in addition, Crowdcube, the London based crowdfunding platform last year partnered with stockbroker Numis Securitiesto develop a crowdfunding IPO platform.
Millennial Crowdfunding : A Brief Insight
To say millennials are a social generation is an understatement to say the least. Generation Y need to be connected to everyone, all the time.
Besides the stereotype of them being hooked on the likes of Snapchat and Facebook and wanting everything in an instant, millennials are an entrepreneurial generation, and they have socialised their professional lives as well. This is where crowdfunding has come into play and millennial entrepreneurs have found success from launching new business as a result of adopting a crowdfunding mode and are using an array of platforms to kick-start their ideas.
Their love of social media goes well with crowdfunding to help them share their great business ideas as well as look at alternative ways to invest (such as property crowdfunding) to being involved in charitable campaigns and earning recognition and social credit by being “seen” doing good online.
Going back to the investing part, millennials are taking a completely different approach from that of their parents and grandparents.Today, all it takes is literally a few clicks on an app for millennials to looks at online reviews, get advice, and even make get involved in a crowdfunded campaign or investment.
While quite a few are weary of get involved in the likes of crowdfunding projects or simply investing, the availability of social media tools is making it easier and more comfortable for this age bracket to learn how these models work.
If you’re reading this and are part of Generation Y and would like to know more about how crowdfunding works, check out our page on how the process works (view here).
Minister of Economy Gives French Crowdfunding Sector a Boost
A few weeks ago we mentioned about French crowdfunding (view here) and have an update from Emmanuel Macron, the French Minister of Economy.
At a recent crowdfunding meeting, the Minister announced that he will propose several changes with regards to crowdfunding regulations in France.
He mentioned that mini bonds be managed by blockchain technology (a promise on his commitment to innovation), plus Macron proposes to raise the ceiling of equity fundraising per issuer from currently €1 million to € 2.5 million and 50% of the issuer’s value (Crowdfund Insider, March, 2016). Lenders will also have a high limit per campaign (limits will be raised to €2,000 and €5,000) currently, crowdfunders are limited to lending €1,000 for interest-bearing loans and €4,000 for interest-free loans according to Crowdfund Insider’s Therese Torris.
On the day Macron stressed that crowdfunding is part of a larger economic and cultural change and that France must seek inspiration and benchmarks from other countries that are championing crowdfunding.
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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