Pensions vs. The House Crowd

According to recent reports in the press, annuity rates are at an all time low. In fact they are so low, you would have to live to 90 to get value for money. And low interest rates and rising life expectancy are pushing rates down even further.

The BBC reported that a man aged 65 living with £30,000 to invest in an annuity would receive £1,719 a year gross for their rest of his life. Put another way, after 17 and a half years the original will have been paid back, so if he had died before then he would have lost out financially.

Compare that with The House Crowd where you would get £2,250 for the rest of your life (with our income only product). That’s a whopping 30% more PLUS you still have your original £30,000 capital which can be accessed when you like or passed on to your heirs (unlike with an annuity which will stay with the insurance company).

And yet, amazingly, pension companies promote themselves as being low risk. I wholeheartedly agree with former Downing Street pensions adviser Ros Altmann who stated that pensioners are not properly warned about the risks involved in buying annuities. She added  ‘If you buy a financial product that can lose more than three quarters of your money, it would usually be considered “high risk” – and those selling it to you would surely have to give you a proper risk warning.’

‘Pensioners take ‘the biggest gamble’ of their lives when they buy an annuity to provide for their retirement. They would have to live until the age of 90 before their annuity became ‘good value’, warned Altmann.

Where we disagree with her is when she said:  ‘Most pensioners, have little option but to buy an annuity if they want a guaranteed income in retirement, will lose much of their nest egg if they die young, become ill or if inflation rises…’ We know people do have an option, but she clearly hasn’t heard about The House Crowd.

Is It Spring Time For Property Investment?

It is worth bearing in mind that, despite the property market being in the doldrums for the last 5 years, property investment as with all other markets, goes in cycles.

If you think of the property investment cycle as seasons in the year, we have been in winter for the last few years.  But the daffodils are starting to bloom and it looks like we may now be in spring – at least in terms of property investment. It may still be chilly, but it’s definitely getting warmer.

Pent up demand from first time buyers, low interest rates on savings and the banking crisis in Cyprus mean more people are turning to property as a safe haven. And this is particularly true of the British property market.

Britain is one of the most established property markets in the world, especially in terms of property investment financing. It is very different in terms of property supply and demand from other countries such as USA, Cyprus, Bulgaria and Dubai where the property prices were inflated because of demand caused by the perceived profits to be made (greed) and the sudden availability of easier borrowing rather than actual demand for accommodation to live in.

The UK market is very different.  I do not think there is any doubt more housing is required for the UK population. Without boring you with stats, for well over a decade, every survey I’ve seen has reported there is a massive shortfall in the amount of housing required to keep up with demand.  Further, the rate at which new houses are being built falls far, far short of predicted requirements. So the gap is widening every year.

It is interesting to note that every time The House Crowd buys a property – typically for about £50,000 – the rebuild costs for insurance purposes are upwards of £80,000 and often closer to £120,000. What that tells me is that if the cost of building new property is considerably more than existing stock (land values aren’t even taken into account in the example above).  Common sense suggests that few people will buy a new build property, when they can get a similar sized property for half the amount.  It is equally clear that developers aren’t going to build property unless they believe people will buy what they have to sell. And just to reiterate it: there is a shortage of housing which increases demand for available property.

It’s a complex relationship and there are differing viewpoints on how it works, but I believe that fairly soon builders will start building again in earnest. Once they start doing so, the price of old stock will be pulled up by the price of new builds as sellers realize they can achieve higher selling prices whilst still pricing their property competitively against new builds.

There are tentative signs that the property market is already beginning to warm up – you may well have seen the news headlines about average property prices now increasing at £25 a day. One factor for this is new investors putting their money into property as they are tired of the woeful returns provided by the banks and pension companies. We have noticed buy to let lending is becoming more readily accessible in the last 6 months.

But that is nothing compared to what will happen next year when the new government incentives kick in, giving buyers the ability to get on the housing ladder without raising a 20% deposit.

One thing I have learned throughout my time in property is not so much the price of a property but the affordability factor that is the biggest influence.  People’s income, the deposit required, the ratio income to borrowing permitted and interest rates all play a much bigger role than the actual price tag.

The government incentives coupled with low interest rates will have a massive affect and greatly increase the demand for property pushing prices higher (although salary levels will keep the increase in check to a degree)

That may be good bad or dangerous depending on your point of view. Some argue that it will create another bubble – and they may well be right. But in terms of achieving capital growth over a relatively short space of time (say the next 5 years), I believe 2013 will prove to be the ideal time to invest into property.  So get your sun cream and your sunglasses out.  A bright hot summer for property investment is on its way… Shame we can’t say the same for the British weather.

FSA gives green light to online crowdfunding platform

The Financial Services Authority (FSA) has for the first time approved a crowdfunding website facilitating direct investment in small businesses. It means investors using the website, Crowdcube, will now be able to claim compensation from the Financial Services Compensation Scheme and access the Financial Ombudsman Service if they have a complaint.

The opinion here at The House Crowd is that it’s good to see a regulator starting to approve dynamic forms of financing like crowdfunding. As demonstrated by our unique business model, crowdfunding can provide great returns for all, in a safe, transparent way.

Currently, as The House Crowd doesn’t fall under the definition of either a CIS (Collective Investment Schemes) or OEIC (Open Ended Investment Companies), we do not require the FSA’s authorisation to operate.  However, even though we are not FSA regulated, we do everything we can to ensure that all our dealings are as transparent as possible and that investors are made fully aware of the risks as well as the rewards in any investment. We also ensure your money is protected as far as possible – you never pay money directly to us, all investment monies are paid to a solicitor’s client account and held there until the property is purchased and your shares are issued.

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/).

The Kitchen Deal Breaker

Many people dream of installing a new kitchen, complete with granite worktops, an island unit and an AGA cooker, but how many people know the true value of making sure your kitchen is up to scratch?

Those in the know often say that a kitchen is the deal breaker room when selling a house, it can literally make or break a sale. It is therefore worth carefully planning any kitchen upgrades you undertake. Here are The House Crowd’s top tips to help you get it right:

-          People are too quick to gut their entire kitchen, often they’ll end up refitting units in exactly the same place. This is because the initial design of the kitchen is likely to be the most practical design. Take time to consider what your new layout would be, will it work?  What do you not like about the practical design of your current kitchen, and how can you solve those problems with your new kitchen?

-          Instead of spending a lot of money replacing everything, why not consider quick-fixes? Modernising unit doors and relaying the floor can save a lot of time and money. Large DIY stores have a good range of upgrade solutions and materials.

-          A common complaint people have is a lack of worktop space. Think about how you can make what you have go further, as unless you’re extending a kitchen, a re-design won’t necessarily give you more space. Solutions like microwave brackets, floating shelves, and flat-folding hinged tables can provide more workable space; there are also amazing new space saving idea available with new kitchens, including pull out work tops that can be put away when not in use.

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/).

Higher or Lower – Getting your asking price right

There are various factors influencing the value of a property, from location, age and size, through to things like heating, windows and appliances. In short, it is fair to say each property is wholly individual. With this in mind, the valuation system used by Estate Agents, usually calculated from recent sale prices of similar properties in the area, is not an exact science and can also be subject to Estate Agent “inflation”.

Sellers, who genuinely believe their property has been incorrectly valued, at either end of the scale, should consider the following points before approaching their estate agent:

-          The recent sale prices of similar properties in your area don’t always tell the full story. Your property may be on a corner with a bigger garden, have newer double-glazing or more modern appliances within, equally, the recently sold properties may have these advantages. Ask yourself objectively, does the current value give a fair assessment of these factors?

-          If you believe your property is undervalued, as is quite often the case, consider that sometimes beginning with a below market price could generate more interest and result in a higher sale price, than if the asking price was higher to begin with.

-          It is widely speculated that setting your property price just below a round number will attract more potential buyers than setting the asking price at the round number itself. Think £199,950, instead of £200,000, this may explain an Estate Agents valuation of your property.

-          Costs involved with buying a property include Chartered Surveyor fees and stamp duty fees amongst others. Bear in mind the percentage of stamp duty that must be paid increases with property prices, so you may attract more buyers by setting your asking price below a stamp duty threshold – for example at £249,950 rather than £250,000.

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/).

Prize Draw: Introduce A Friend And Win A £1000 Share In The House Crowd

Prize Draw: Introduce A Friend And Win A £1000 Share In The House Crowd

We are pleased to announce the launch of our prize draw, where you can win a £1,000 share in a House Crowd project, including the annual 6% dividend and 50% share of profits on sale. It is quite literally the prize that keeps on giving!

Entry to the prize draw is completely free of charge. To be eligible, all you have to do is recommend The House Crowd to a friend or family member, send us the names of those people, and if they invest you will automatically be entered into the prize draw!

Alternatively, if you prefer, just copy us on the emails you send out to your prospective crowd funders. Please do not send out hundreds of emails to every Tom, Dick and Harry. Only invite people you know well and think might be interested in what The House Crowd offers. We will conduct a draw every six months and announce the winner in The House Crowd newsletter. The first prize draw will take place in April 2013… Ready, Set, Recommend!

Please ensure all correspondence for the competition and requests for the friends and family email template are directed to [email protected]

Property crowdfunding is now taking the investment world by storm, following our brave debut onto the scene in 2012. We were the first (and continue to be the best) platform for property crowdfunding.

We are proud to offer better returns on investment than many other investment models, and allow people previously locked out of the property market to benefit from the lucrative world of property investment. What’s more, we’re helping bring much-needed new homes across the Greater Manchester area.

For more information on the process of getting involved with property crowdfunding, visit our Crowdfunding Process page.

We are committed to breathing life into empty, rundown properties whilst giving investors great returns on their investments.

To find out more about getting great returns on investment with The House Crowd, start by getting to know us here.

Better Returns On Investment Than The Big Four Banks

Better Returns On Investment Than The Big Four Banks

One of the many advantages of investing in The House Crowd is the fact that we’re all in it together with collective interests, meaning that, unlike the banks of late, we are straightforward, transparent and honest with you about your investment.

But, how do we compare to banks in terms of financial returns?

Well, top performing bank rates taken from MoneySupermarket.com show you can expect a 2.6% annual return on an easy access no bonus account, a 3.2% annual return on an easy access with bonus account and a 3.85% annual return on a 3-year fixed rate bond.

Compare these figures to our bricks and mortar secured minimum annual return of 6%, plus a share of profits upon sale, and the more attractive investment option is really quite clear.

Update: Figures correct at time of writing. And our returns on investment are even better now than they were when this article was originally written in 2012.

Add an ethical purpose, regular updates and the ability to spread your risk to the excellent financial incentives, and we think you’ll see why so many people have already joined The House Crowd.

Property crowdfunding is now taking the investment world by storm, following our brave debut onto the scene in 2012. We offer better returns on investment than many other investment models, and allow people previously locked out of the property market to benefit from the lucrative world of property investment. What’s more, we’re helping bring much-needed new homes across the Greater Manchester area.

For more information on the process of getting involved with property crowdfunding, visit our Crowdfunding Process page.

We are committed to breathing life into empty, rundown properties whilst giving investors great returns on their investments.

To find out more about getting great returns on investment with The House Crowd, start by getting to know us here.

Top presentation tips for selling your home – part 2

Below is the second installment of our easy-to-implement top tips for maximising your chances of selling:

  • Temporarily removing family photos is an important and often overlooked piece of advice for those looking to sell. Home buyers, especially those buying for the first time, need to feel like they could belong in a property before they will put an offer in. Prominent family photos can have a negative influence on this process.
  • If you have pets, make sure you fully remove the smell by airing out your home and remove all hair – some viewers may have allergies. It can even be worth asking an honest friend or family member to visit your house to scrutinise, as over time you become accustomed to the smell of your own home and pets, good or bad!
  • Introducing light, preferably by removing any net curtains or blinds and moving large furniture away from windows, is essential. An immaculately tidied house can go to waste if poorly-lit. Be sure to focus lighting in areas you want to draw attention to – for example any exposed brick, impressive fireplaces or period features.
  •  Although not directly an action to improve presentation, choosing your estate agent well is vital to selling your property as they have huge influence over a viewer. Taking your time to select an estate agent who will present the positives and potential of your property to the best of their ability is crucial. You can go some way to making sure an estate agent is doing your home justice by providing them with a simple room-by-room guide to the strongest must-mention features of the property.

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/).

Property Investment Project Update 003

If you’re a member, you will have already received our latest property investment information announcing that House Crowd Project 003, on Old Lane, Little Hulton is on the market for sale. Hooray!!!

The property was purchased this year in May for £39,000 and after £15,000 of refurbishment costs, a great deal of blood, sweat and tears – Ok,  maybe not the blood part, and some major issues (all resolved now!) it has been given a new lease of life and is currently on the market and expected to sell for £72,000, an estimated 25% ROI after costs. Not bad hey!

When dealing with property – especially with repossessed property – there are plenty of problems and setbacks. Of course, if it was easy, everyone would be doing it, and that’s why we are here – to deal with the problems that inevitably arise and let you get on with your life free of the hassle.

You can see before and after pictures of Old Lane on our Facebook page – We’ve also added a few snaps of our very own Managing Director, Frazer Fearnhead, sleeves rolled up, getting his hands dirty, applying the finishing touches to the house.

 

 

Tips for successfully gaining planning permission – part I

Here at The House Crowd, we believe that well planned and properly implemented home improvements are a great method for increasing the value of residential property. Clearly, we are not the only ones with this outlook, as in the past year alone, almost 200,000 UK homeowners have applied for permission to alter or enhance their properties.

The Government recently announced it will press forward its plans to relax red tape restrictions and other, unnecessary bureaucracy from planning, making it simpler to carry out property modifications – great news! However, as these intentions are not yet set in stone, below we have provided the first instalment of our top tips for maximising your chances of gaining planning permission in the interim:

  • Carry out comprehensive research on the latest rules and regulations. It is important to know what you are doing, as it is worryingly easy to break planning laws unintentionally. Consulting a qualified architect or approaching your local council should help ensure you stay on the right side of the law. Builders, regardless of their likely good intentions, are an impartial party and shouldn’t be entirely relied upon.
  • Another advantage of doing your research is that you can actually make some significant modifications to a property without needing permission. Planning exempt developments include increasingly popular, small basement conversions and some rear extensions.

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/).