April – Monthly Property Development Update

April 2017

Here is a round-up of our latest developments and how they are progressing, with pictures available on the links below the descriptions.

HCD10 – Bollin Heights

Work is progressing on schedule and the show apartment is now complete and looks great.

We have applied for planning permission for phase 2, and expect a positive decision on 8th May as it is not contentious.

Sales proceeds are now £300,000 over what was anticipated.

Click here to see latest photos

HCD5 – Bank Chambers

Work is now well underway and proceeding apace. The conservation officer has signed off on all works for the top two floors. Discussions regarding the extra apartments on the ground floor are ongoing.

Click here to see latest photos

HCD4 – Gratrix Park

This development is progressing well with no issues. Sales are strong with 12 units reserved, and we have increased prices slightly.

Click here to see latest photos

HCD3 – The Woodlands

Work has now started after all the council’s issues have been resolved. We are working to get the show home and on-site sales office built ASAP to aid sales. Although the start of works has been significantly delayed, the contractors should be able to make up most of the time lost and will do so once enough confirmed sales have been made.

Click here to see latest photos

HCD2 – 10 Congleton Road, Alderley Edge

Work is proceeding apace with no problems. We will be raising money for the final stage next month (May 2017).

Click here to see latest photos

HCD1 – Regent St

Unfortunately, the expected bulk sale fell through. We have changed agents and improved marketing and have decided to drop the price in the hopes of attracting interest. There are no confirmed sales on the remaining 5 as yet, although there are various interested parties.

HCP156 – 103 Station Road, Marple

The cellar and all other remedial works have now been completed and the property will be going back on the market ASAP.  The cellar is now a habitable space.

Click here to see latest photos

HCD7 – Brundred Farm

Following the rejection of our planning application despite the planners recommending it, our purchase option has been extended for 8 months. The planning appeal is being prepared and will be submitted imminently.

Don’t forget, if you need any help with the investment process, you can call our client account team on 0161 667 4264. 

 

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Performance Statistics: March 2017

Performance Statistics: March 2017

The figures are now in for our performance statistics from last month. You will see below our summary figures from the dividend, interest and capital payments made in March 2017. You can also see our total cumulative returns from 2013, which you may also find helpful to know.

March 2017

  • Projects paid out against = 20
  • Total value of dividends and interest paid = £217,583.03
  • Total value of capital repaid = £2,015,907.39 (1 x development capital, 1 x bridging loan)
  • Total number of investors paid = 694

Total for 2017 So Far

  • Projects paid out against = 64
  • Total value of dividends and interest paid = £374,095.83
  • Total value of capital repaid = £2,881,907.39
  • Total number of investors paid = 1,714

Cumulative (from January 2013)

  • Project paid out against = 498
  • Total value of dividends and interest paid = £1,509,720.83
  • Total value of capital repaid = £7,887,627.39
  • Total number of investors paid = 10,212

To find out more about investing with The House Crowd, you can register with us by clicking on the purple button below. Alternatively, take a look at our current property investment opportunities by clicking the blue button! Either way, we’re always here to answer your questions in any way we can.

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Should You Judge A Book By Its Cover?

Do you think you should judge a book by its cover? Whether it’s fair to do so or not, it’s a fact that people do – literally and metaphorically speaking.

Whether it’s fair to do so or not, it’s a fact that people do – literally and metaphorically speaking.

Designing the right cover for a book is therefore important, and we would love to get your feedback, before making a final decision on which cover to choose for Frazer’s book.

We have narrowed it down to two choices and would be very grateful for your input.

Chose your favourite cover here


To find out more about investing with The House Crowd, you can register with us by clicking on the purple button below. Alternatively, take a look at our current property investment opportunities by clicking the blue button! Either way, we’re always here to answer your questions in any way we can.

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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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Name That Book!

Frazer, our CEO, has written another book – his first one was a novel called The Cheshire Sect which is available to buy on Amazon.

This second book is all about how you can build your wealth using property crowdfunding.

It’s due for publication in April but, before it’s published, he would like your advice on what to call it.

We’ve narrowed it down to two potential titles. Just click here to tell us which you think is best.


To find out more about investing with The House Crowd, you can register with us by clicking on the purple button below. Alternatively, take a look at our current property investment opportunities by clicking the blue button! Either way, we’re always here to answer your questions in any way we can.

Register Now for more Info

View our Property Investments

 

Performance Statistics: February 2017

Performance Statistics: February 2017

The figures are now in for our performance statistics from last month. You will see below our summary figures from the dividend, interest and capital payments made in February 2017. You can also see our total cumulative returns from 2013, which you may also find helpful to know.

February 2017

  • Projects paid out against = 22
  • Total value of dividends and interest paid = £73,730.53
  • Total value of capital repaid = £493,000 (1 x development capital, 1 x bridging loan)
  • Total number of investors paid = 478

Total for 2017 So Far

  • Projects paid out against = 44
  • Total value of dividends and interest paid = £156,425.94
  • Total value of capital repaid = £866,000 (1 x development capital)
  • Total number of investors paid = 1,020

Cumulative (from January 2013)

  • Project paid out against = 478
  • Total value of dividends and interest paid = £1,292,050.94
  • Total value of capital repaid = £5,871,720.00
  • Total number of investors paid = 9,518

To find out more about investing with The House Crowd, you can register with us by clicking on the purple button below. Alternatively, take a look at our current property investment opportunities by clicking the blue button! Either way, we’re always here to answer your questions in any way we can.

Register Now for more Info

View our Property Investments

 

Performance Statistics: January 2017

Performance Statistics: January 2017

The figures are now in for our performance statistics from last month. You will see below our summary figures from the dividend, interest and capital payments made in January 2017. You can also see our total cumulative returns from 2013, which you may also find helpful to know.

January 2017

  • Projects paid out against = 22
  • Total value of dividends and interest paid = £82,695.41
  • Total value of capital repaid = £373,000 (1 x development capital)
  • Total number of investors paid = 542

Total for 2017 So Far

  • Projects paid out against = 22
  • Total value of dividends and interest paid = £82,695.41
  • Total value of capital repaid = £373,000 (1 x development capital)
  • Total number of investors paid = 542

Cumulative (from January 2013)

  • Project paid out against = 456
  • Total value of dividends and interest paid = £1,218,320.41
  • Total value of capital repaid = £5,378,720.00
  • Total number of investors paid = 9,040

To find out more about investing with The House Crowd, you can register with us by clicking on the purple button below. Alternatively, take a look at our current property investment opportunities by clicking the blue button! Either way, we’re always here to answer your questions in any way we can.

 

View our Property Investments

Register Now for more Info

Our Track Record For Rental Properties

Our Assured Rental Portfolio: Statistics For The Last 12 Months

The House Crowd started off in March 2012 buying small terraced houses for around £50,000. As our database grew, it became easier to raise funds and the company has evolved to financing multi-million-pound developments; however, the familiarity of the original buy to let concept, is still popular with many of our developers.

We found during our first four years that renting at the low end of the market is met with some difficulties. Despite our best intentions to provide good quality homes for people, with the expectation they would respect and look after the property, in too many cases (around 20%) non-payment of rent and damage to the property, were undermining the returns we could pay. Our plan was to find a way to satisfy the demand for this type of property, whilst delivering predictable and consistent returns for our investors.

And, I am pleased to say that we found a solution that has proven to work very well in delivering both exceptionally high gross yields and net returns.

That solution is our Assured Rental Product.

We launched our first one in January 2016 and over the course of 2016 purchased 16 more. They have all performed exactly as detailed in our financial forecasts for each project and delivered an average of 9.2% gross yield and 5.6% net return to investors after all costs, fees and corporation tax. This should make it ideal for those who want a long-term, income-producing investment backed by bricks and mortar.

The only real disadvantage to these investments is that the criteria of the corporate tenant we work can be very precise. It is time-consuming to find and convert properties according to their specifications and therefore we pay a premium for that.

The properties are treated and valued by surveyors as commercial properties. This means to achieve an uplift on a sale in the future, it will probably be necessary to sell the property to an investor, which undoubtedly limits the exit market; however, we believe high yielding properties with assured rental agreements in place will be attractive to many prospective investor purchasers.

Click here for a detailed financial summary of all properties purchased to date

For those not familiar with the assured rental product, here are the important facts:

  • The properties are let as HMOs to a large corporation on a five-year assured rental agreement
  • The corporate tenant is responsible for all maintenance costs up to £5000 per year
  • There are no void periods
  • Rent is paid two months in arrears but to date has been paid on time every time
  • The properties produce a gross yield of 9-10%
  • The average net yield is 8.5%
  • The average net return to investors after all costs is 5.6%
  • Dividends are paid quarterly
  • All properties purchased to date have delivered returns as forecast

2017 Property Market Forecast

Is Buy to Let Dead?

The buy to let market in the UK really gained traction in 1996, with the opening of the mortgage market. This made property investment accessible to millions who had been previously prevented from seeking better returns through property, as opposed to the pitiful rates provided by their institutional pensions.

It proved immensely popular, and many people found the idea of property as a way to provide a retirement income preferable to putting their money in a traditional pension. However, over the last two years, these people have been ruthlessly stabbed in the back by the government who have crippled the ability of small landlords to make any sort of profit.

Not only has there been an increasing amount of red tape and financial burden placed upon landlords in recent years, but George Osbourne saw fit to increase stamp duty and, in an astonishingly cynical move, he decreed that landlords should be treated differently than every other type of UK business and would not be able to offset loan interest payments against revenue.

What this means for the large majority of landlords who have mortgages and do not operate under a limited company structure, is that they will incur heavy losses and could potentially be forced into bankruptcy, as their increased tax bill exceeds their rental income. What’s worse is that research indicates only a small percentage of landlords are aware of this cataclysmic change and the effect it will have.

It seems clear to me that the traditional way of investing in buy to let property that has thrived over the last 20 years is, as far as most people are concerned, no longer an option. Property, however, is destined to remain the nation’s favourite asset class but the types of property, and the way people invest in it need to change.

We, at The House Crowd, find the Government’s attack on, and lack of concern for small landlords, utterly reprehensible, but fortunately, we are in a position to help. Crowdfunding and peer to peer secured lending, have emerged as very popular ways people can build their wealth through property. Given the legal and tax changes, they now seem set to replace traditional buy to let as the best and perhaps the only way, ordinary investors can still benefit from direct property investment.

If you want a longer-term investment, secured with the ownership of real bricks and mortar, we have a steady stream of properties with assured rental – thus removing many of the risks and variables associated with property investment. These properties also produce a very decent return – a gross yield of 9.5% which should produce a net return to investors of at least 5.5% after all fees and costs. Investors will also benefit from any capital growth on sale.

So whilst buy to let may not be completely dead, it will really only be viable, after April 2017, when the tax changes take effect, via a company structure and payment of large deposits or through crowdfunding platforms.

What Will Replace Buy to Let?

Buy to let may have been killed off but the PRS (Private Rental Sector) has grown apace over the last few years, with property funds and other institutional investors pouring money into the sector. PRS, for those unfamiliar with the term, generally refers to purpose built blocks owned by institutions – generally with a high standard of communal facilities designed to attract and keep tenants long term.

The government is also now throwing its support behind PRS and the build-to-rent sector with large urban developments being financed by institutional funds and managed by large companies to cater for Generation Rent. For example, the government has announced that £45 million of its new £3 billion Home Building Fund will go towards kick-starting a deal involving 2,000 new build-to-rent homes. This includes 995 new purpose built units in Manchester, currently the city with the UK’s highest yields. Combined with the recent attacks on buy to let, it is likely that this will consolidate build-to-rent as the future of rented living and property investment in Britain.

Given the scale of the developments, and the money required to finance them, it is clearly not something readily accessible to individual investors. And, here again, is where crowdfunding comes into its own.

The House Crowd is ideally placed to help those people who are seeking a lower risk, longer term investment with build-to-rent. We are currently financing the building of over 100 units in the Manchester area and, whilst most have been built to sell, we will be introducing build-to-rent developments shortly with the intention of providing our investors with the ability to earn a steady annual return with the upside of long-term capital growth. Being a part owner of larger developments will also help mitigate risk.

We are, in effect, giving the individual investor, the opportunity to benefit from the growth of the build-to-rent sector and earn returns on par with institutional investors.

Best Places to Invest In 2017

It will come as no surprise to learn that I think Greater Manchester is the best place to invest, and I am not the only one, as many pieces of research forecast the same.

It’s not difficult to see why – Manchester offers the ideal combination of high yields and decent capital growth, something that London cannot. Predictions are that rents will increase by 5% in 2017, with capital appreciation to reach 4-5%.

The city has benefited from successive governments’ attempts to invest more money outside of London. Thousands of overseas students now come to Manchester each year, and it has fast established itself as an international talent pool with a booming rental population.

Manchester’s reputation as a property hotspot was recently reaffirmed by research from Lambert Smith Hampton, which revealed that 68% of property investors see it as the best place to invest.

I also see Stockport, in Greater Manchester, as a particularly strong area and think it should be at the top of the list for any investor hoping to achieve strong, consistent returns through property. Seven miles south-east of Manchester city centre and eight miles from Manchester Airport, the commuter town boasts direct rail services to Manchester, Liverpool, Birmingham and London. With a £42 million transport interchange under construction and £1 billion being invested across retail, residential and commercial sectors over the next five years, Stockport is establishing itself as a regional business hub.

Over the past year, property prices in Stockport have increased by 15.9%, and 1,100 new homes will be built over the next five years to cope with increasing demand. Properties in the area offer investors strong, consistent yields – a safer bet than relying on speculative capital growth.

http://www.manchestereveningnews.co.uk/news/local-news/timetable-1bn-regeneration-stockport-revealed-12292326

Reasons to Invest With The House Crowd in 2017

  • Specialists in Greater Manchester property – forecast by many experts to be the best area to invest
  • We offer traditional high yielding properties with assured rental
  • With over 100 new build properties either completed or in development, we are committed (in our own small way) to helping build the houses Britain needs
  • We are ideally placed to capitalise on both build to sell and the build to rent sector – which, backed by the government, is believed to be the future of the rental market
  • We enable access to individuals to participate in large scale developments investments with security and returns on par with those institutional funds receive
  • Choice: we offer
    • Short-term fixed-rate debt investments for those who want high returns and liquidity,
    • Longer term equity investments where investors share in both income and capital growth
  • No borrowing on property purchases means lower level of risk and less vulnerability to fluctuations in interest rates
  • Crowdfunding provides perhaps the only viable option for most people to continue to invest in property

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The UK Housing Crisis: Supply and Demand

The UK Housing Crisis: Supply and Demand

2016 has been full of shaky times for the UK property market. However, there have been no actual signs of prices dropping, despite the Brexit naysayers’ warnings. Negative headlines about the UK housing crisis are still milling about, but there is one aspect of the property market in particular which is promising to keep the market afloat. That aspect is the continuing lack of supply.

The lack of properties for sale has helped to support the market, and to push prices higher. That’s before we even take the undersupply of newbuilds into consideration. This undersupply has been going on for decades, whilst successive governments have sought to garner good feeling among voters with artificial support of property prices. There is no end to this situation in sight at the moment.

There was a small fall in prices after the Brexit vote, reigniting hysteria over the UK housing crisis. Nonetheless, the UK continues to be a popular target for overseas investors, indeed, there was a surge in overseas interest following the referendum result. Indeed, looking at the state of the pound at present, it’s clear as to why we are gaining attention from overseas.

Along with the lack of supply, we are seeing a growing state of pent-up demand for property in the UK. A scarcity of properties, combined with high competition between buyers, is a recipe for further property price inflation. This, too, will affect the rental market, as more households find themselves priced out of the purchase market than is already the case.

UK Housing Crisis Affects Rental Market

Higher demand for rental accommodation, combined with a reluctance of investors to approach buy-to-let following the stamp duty hikes and other attacks on landlords in 2016, may push rent higher. Great news for investors, and build-to-let in particular; not such good news for tenants – those who feel the brunt of the UK housing crisis hardest.

The answer is new builds. However, we are struggling to meet demand in this area too. Currently, 200,000 new properties are required per year, and we are still falling desperately short of that. The population is growing, and everybody needs to live somewhere. Something, clearly, has got to give.

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Could Property Crowdfunding Help the UK Housing Crisis?

Property crowdfunding may offer a partial solution to this conundrum. Pooled funds being pumped into development of properties, particularly in areas like the in-demand North West, alleviates the buy-to-let problems that outright-ownership landlords are facing, as everything is managed through the SPV (Special Purpose Vehicle) in which the shareholders’ funds are invested.

Though property prices and rent will not be directly lowered by these developments, it may alleviate a small portion of the supply shortage. After all, every little helps.

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