The Ticking Retirement Timebomb & How To Protect Yourself

The Ticking Retirement Timebomb & How To Protect Yourself

On Monday 4th December Frazer presented a webinar entitled The Ticking Retirement Timebomb and How To Protect Yourself.

You can view a recording of his presentation here.

As promised on the night, we have collated all questions asked on the night and provided responses below.

If you have further questions please get in touch with our friendly member support team (Damian and Nigel) in the following ways:

Email: [email protected], or [email protected]

Call: 0161 667 4264

We are here to help 9-6 Monday-Friday. 

Questions and Answers…

“Do you have any statistics about how often your properties lose in value and the investors lose their money?”

There has been no loss of in any of our peer to peer loans or development deals. The only time our investors have ever lost money was in respect of one speculative off plan deal for a development in Sutton, Surrey. That particular deal was marketed as being high risk. It is something we offered as a one off and will not be offering again.

“When is The House Crowd going to get full FCA accreditation?”

Hopefully any time now. Our case manager has approved our application and we are just waiting for it to be signed off by the FCA. 

I am coming up 50 years old. Due to a combination of circumstances I have no retirement plan in place. I have fortunately paid off all my debts, but have a substantial mortgage. It feels that retirement planning or mortgage servicing are mutually exclusive?”

Unfortunately, we cannot offer financial advice so can’t offer an opinion on whether it’s best for you to pay your mortgage down quickly or look towards alternative investments.

What we can say is that, peer to peer lending generally offers higher interest, but does come with an element of risk. We do everything we can to mitigate these risks but the decision to invest is very much down to you, your personal circumstances and your appetite for risk (however small that risk actually is). 

“Can you explain what happens to my money if the person lending it doesn’t repay the loan on time?”

Re – Peer to peer lending – I have recently written explaining how our lending process works and what happens if a borrower doesn’t repay on time. You can read more here.

Re – Property development crowdfunding – Repayment is dependent on us selling the houses. If it takes longer to sell than estimated then you will be paid back later, but you will continue to earn interest until you are repaid.

“I was planning on investing a few months ago but found the sign-up process quite difficult. Can you help me with these steps?”

If you’re having any problems registering your account you can contact our Member Support team – Damian and Nigel. They can help you through the process and answer your questions. Our office hours are 9-6 Monday-Friday.

Also, you’ll be pleased to know we will be launching a brand-new website in early 2018. Over the past 12 months we have recruited an in-house tech team who have been working to make everything easier for our members. We’re pretty excited about this development and will send more details in the New Year.

“I like the idea of peer to peer lending but I don’t have the time to keep on top of everything you have to offer. Is there some way I can set up my account to invest in certain products automatically?”

We have exciting plans to develop new, easier ‘auto invest’ products in 2018. This means you can invest your funds into one product and we will spread them into a more diverse portfolio. You just earn a fixed rate and don’t have to do anything more.

In the meantime, you may be interested to know we offer free text alerts to notify people when we launch a new investment opportunity. You can join this free service by texting THC to 82228 (service applies to UK mobiles only).

“I filled in a form for the free info pack a while back but when I go to login at The House Crowd it doesn’t work. Please can you help?”

Due to the way our systems are set up at the moment if you downloaded a free information pack on our website you won’t automatically be registered as a House Crowd member.

Just click on this link to register your free account. Remember to complete your profile as well – this only takes a couple of minutes. Once done you’ll be able to view all our current investments in more detail and receive free email alerts when new investments are launched.

Do you charge any fees if I invest with you?”

No, the interest percentage on each product quoted is the amount paid to you, there are no deductions.

“I really enjoyed the webinar. Are you planning on doing more in the future?”

Thanks for your positive feedback! We are planning a new webinar explaining how our property development crowdfunded loans work in the New Year. We will send you an invite a week or two in advance of that one.

 

 

 

 

Frazer’s blog – Interest rate rises, latest House Crowd news and more…

Interest rates went up, as we all know, by 0.25% and, whilst banks were quickly to change their mortgage rates, only some have passed on the increased rate to savings accounts – and only marginally at that. My view is we won’t see another rise for quite a while and despite its perceived security, the only thing certain about leaving your money in a bank account is it will be worth less next year than it is right now.

At The House Crowd, we had another excellent fundraising month and exceeded Lewis’s forecasts again.

We returned over £1.4 million to investors in capital and interest. If you missed my last email about processes and defaults on peer to peer loans you can access it here.

The first people moved into their homes in our Gratrix Park development and one of them has put theirs on the market for £90k more than they bought it for. We know we sold them for a good price but we think that’s a little optimistic. Still good luck to them.

We held an Open Day at the office last week. It was great to meet some local and some not so local investors.  Big thanks to John from Nottingham, Alex from Wrexham and Jessica who came all the way from Margate (wow!) for braving the NW motorway system and making such an effort.

As well as meeting our team, attendees were given a sneak preview of the new website our in-house tech team have been working hard on developing. I am glad to say it got rave reviews from everybody and we are very excited to about its launch which should be mid-December.

David Roberts, our London based Investment Director, gave a well-received talk at The Investor Show in Olympia called The Billionaire’s Property Secret. If you would like to watch a webinar version of it, you can access it here

Talking of webinars, I am presenting a masterclass called ‘The Ticking Retirement TimeBomb And How You Can Protect Yourself’ on Monday 4th December at 7pm. Places are free but limited. Register here

That’s all folks.

Frazer

An Introduction to Investing Through Property Crowdfunding

An Introduction to Investing Through Property Crowdfunding

Traditionally, only those with access to large amounts of capital have been able to invest in the lucrative world of property. Managing a portfolio is normally time-consuming, business, which becomes increasingly more burdensome as the investor’s portfolio becomes larger.

However, in the last few years, a new method of property investment has emerged which has effectively democratised the entire investment process, allowing more people than ever to benefit from the financial gains that property investment can offer.

Property crowdfunding started to take off in 2012, and is now worth billions of dollars a year worldwide. The value of the industry currently doubles every two months, and is set to be worth $250bn by 2020.

The growth of the property crowdfunding industry has been catalysed, in part, by the relaxation of regulations over the last few years. The Government has identified the industry as being hugely beneficial to the economy, and has also begun investing in crowdfunding itself. Institutional investment is also coming into play at an increasing rate, and high net worth investors, attracted by the simplicity of the process, and the returns available, are also investing through property crowdfunding.

But why is investing in property crowdfunding proving so popular?

Offering the chance to build a diverse portfolio without all the legwork involved in traditional property investment models, and with the opportunity for significant gains, it’s no surprise that investing in property crowdfunding has grown exponentially in the last few years.

What’s more, as interest rates on savings continue to crawl along the seabed, and returns from both rental and sales continue to rise, more and more people are waking up to crowdfunding as a simple way to grow their money.

How Does It Work?

Property crowdfunding encompasses both equity investments and debt based investment (also known as peer to peer secured lending).

The concept itself is relatively simple.

Equity investments involve a group of people pooling their cash to buy a property as shareholders through a ‘Special Purpose Vehicle’ (SPV). The SPV is a limited company, set up solely for the purchase of that property. The SPV handles all the work, fees and maintenance of the property, whilst the shareholders receive their proportion of the rental yields, and/or share of capital gains when the property is sold.

People can invest even very small sums in buying shares in the property. On some platforms, this is as low as £50, but the typical minimum is between £500 and £1000. One of the advantages of property crowdfunding is that you can spread your available capital over a number of different properties across the crowdfunding platform, to mitigate risk.

View our Property Investments

Getting started is a very quick and easy process. You simply register on your chosen website – it is an FCA requirement that only registered and accredited investors may participate, and, once registered, you simply select the properties you wish to invest in.

Debt based investments again involve pooling resources, in this instance, to make micro loans through the platform to a third party borrower. The loan as a whole is secured against the borrower’s property and the platform appoints an agent to act on behalf of lenders and take any necessary enforcement action. These types of investment are usually short term (up to 12 months, and pay a fixed rate of interest with no capital growth).

Where Did It Start?

The House Crowd is the longest-established property crowdfunding platform. It began trading in 2012 and offers both debt and equity investments. Since then, other companies have followed in their footsteps, such as Property Moose in 2013, and Property Partner and Crowdlords in 2014. The industry continues to expand, with several new platforms emerging each year.

Is It Regulated?

Property crowdfunding firms are all regulated by the Financial Conduct Authority (FCA), which ensures that platforms are managed properly, and that risks are made completely clear to investors. As with any investment, there is risk to capital – but it’s worth comparing this risk against other investment classes, and seeing how property crowdfunding stacks up.

Before investing through property crowdfunding platforms, it is very important to do your research. Every regulated platform should have the FCA authorisation number clearly visible on their website. If you can’t find these details, you should steer clear as they are not operating legally.

Is It The Right Choice For Me?

As with any investment, you need to take into account your personal circumstances to establish whether it is the right one for you.

You can find out more about establishing whether property crowdfunding is the right investment for you here.

Ask yourself what you wish to achieve. Investors with a lot of professional experience and access to bank funding, may find the model less appealing than novices.

If, on the other hand, you don’t have a deposit available, or aren’t able to get a mortgage, then investing through property crowdfunding could be an ideal way for you to access this asset class. And, given the government’s recent attacks on landlords, which has severely undermined the profitability and viability of buy-to-let investing for individual investors, it may well be that crowdfunding remains the only sensible option available for most.

Risk

The same principles that apply to other forms of property investment also apply to crowdfunding. You should be aware that capital growth profits are speculative, and investing in properties that produce a healthy cash flow is the more sensible approach.

One of the major risks associated with cash flow positive properties is that of damage or non-payment of rent. As such, you should always factor this in as an eventuality that may affect your yields. As mentioned above, however, if you have a well-diversified portfolio, with your capital spread over several properties, any losses due to one bad tenant will be more bearable than if you had all your eggs in one basket.

View our Property Investments

At the end of the day, it all comes down to your risk tolerance. You do lose a large amount of leverage by investing through property crowdfunding, and you will only benefit proportionately from the property’s capital growth but, at the same time, having no borrowing means significantly less risk as there are no mortgage payments and no danger of the property being repossessed (as shareholders own it outright).

If making crowdfunded debt-based investment, (aka peer to peer lending) you need to know what would happen if the borrower defaults and does not repay the loan. You should ask questions about how your investment would be protected, what happens in the event of a default – how easy is it to take control of the secured property? – and how much equity is available to enable you to recover your money should the worst happen. Unless there is sufficient equity in the property, you could risk losing some or all of your money.

If you opt for debt-based investments, your investment will be secured by a legal charge. A critical matter to consider is at what LTV the loan is made. If, for example, a loan is made at ‘75% LTV’, it means that you will be at risk of losing some of your capital if the borrower defaults, the property has to be seized, and is sold for less than 75% of its current valuation.

Debt investments are generally considered to be lower risk than equity investments, as lenders are always paid out before shareholders, however, you do not get the potential upside of capital growth.

What About If I Want Out of My Investment?

If you need a liquid asset, then property is not the best choice.

Investing through property crowdfunding facilitates liquidity to some degree as it may be easier to sell shares in a property than the whole property. However, there is never any guarantee that you will be able to find a buyer, and, if you cannot do so, you will have to wait until the property is sold.

Some platforms will help you to find a buyer after the expiry of a minimum term, but you should check the small print before you invest. If you’re looking for a short term investment, P2P secured lending may be the better option.

To Conclude

We hope that this has offered you some valuable insight into getting started investing through property crowdfunding. Of course, you should know everything about the ins and outs of any investment before you part with your money, and we are fully committed to helping you know all you need to.

Register Now for more Info

If you have any questions, you can always get in touch with us and we will be very happy to fill you in.

Property Crowdfunding: Is It The Right Investment For Me?

Property Crowdfunding: Is It The Right Investment For Me?

Property crowdfunding is becoming an ever-more popular way for people to invest in property, often with significantly less money than investing the traditional way. However, before you jump in, it’s a good idea to assess whether this is the right investment choice for you and your circumstances.

You can view our current property investment options here.

What Do You Want To Achieve?

The first question to ask yourself when considering property crowdfunding is what you wish to achieve from your investment.

If you are looking for an investment that requires less ongoing attention than owning a property for either development or rental, or you personally have more faith in the property market than the stock market, then it could be right for you. Nonetheless, plenty of investors in property welcome the sense of control that owning a property outright brings.

Though there is more additional financial outlay involved in the purchase and maintenance of a property owned this way, some people would rather be involved in all aspects of their investment than leave it to another party.

You can find out more by registering here.

What Experience in Property Investment Do You Have?

This follows on to the second question you need to ask. How experienced are you as a property investor?

If you’ve been a full-time, outright property investor for some time, and have access to the bank funding required to own and develop a property yourself, then property crowdfunding may be less appealing.

For those who know how the market works, and perhaps already have all the necessary contacts they need for the properties they invest in, benefitting from more of the profits (after paying off loans), as opposed to their share percentage, may be a more attractive investment option.

If none of this applies to you, then you could be the sort of person who would benefit from property crowdfunding, depending your circumstances.

What Are Your Circumstances?

For novice or less experienced investors, or those who have less access to bank funding, then property crowdfunding can offer an opportunity to invest in property that is unavailable through other means. For those who are interested in the prospect of weathering the risks of property investment, rather than earning scarcely any interest on their savings accounts, again, property crowdfunding may offer an alternative path.

Whenever you consider an investment, whichever form this may take, you need to ensure that you are covered in the event that the investment takes a turn for the worst. You should only ever invest what you can afford, so make sure your calculations are correct, and you won’t cause yourself financial harm if, for any reason, the value of your investment falls.

Register Now for more Info

To Conclude

As a final note, if you decide to invest in property crowdfunding, there is further investigation to be undertaken. You will need to choose the right crowdfunding platform. It is very important to do your research, and to only settle on the platform that meets all your needs and requirements. Make sure they are regulated by the FCA, that they have a good reputation, and that their customer service and complaints procedures meet your standards.

View our Property Investments

Entrusting your money with any investment vehicle is a decision that should never be made lightly. Ensuring that you are confident with all aspects of the investment is crucial, including the issue of risk. Property crowdfunding is no different to most other investment types, in that there is always a risk of loss. Knowing everything you can, and choosing the right investment for you, is the key to investing happily, smartly, and – hopefully – profitably.

 

Newton Heath and Marple Development Updates

Newton Heath and Marple Development Updates

Newton Heath Manchester
It has been a few weeks since our last update for the new build development of townhouses in Newton Heath Manchester.
In fact in the last blog it really did look like a building site.
A few months later and the interior designers have worked their magic and the contemporary living spaces are starting to look like homes.

10-10-newton-lounge

 

As you can see from the photographs, the light open kitchen dining areas should prove very popular for those modern families who enjoying entertaining.

10-10-newton-kitchen

The spacious lounge area and bedrooms certainly make these properties stand out from other townhouses in the area.
The bedrooms have been decorated and dressed in soft neutrals to ensure the light airy feel continues throughout.

10-10-newton-bedroom

The team have worked hard to ensure that the finish and specification in the bathrooms have certainly kept our promise of contemporary high specification housing.

10-10-newton-bathroom

Station Road Marple.

Just a few miles away in the leafy village of Marple our project at Station Road is now looking absolutely stunning.

10-10-marple-front
This extensive renovation has ensured that we have kept the character of the property along with the stylish contemporary extension to the rear (photographs to follow of the internal living space).
The property looks incredible and the external landscaping to the rear certainly looks a bit different in these two before and after snaps!

10-10-marple-rear

The photograph above shows the new decked area and extensive living room extension. The removal of the tarmac driveway and old fencing has enabled us to extend the lawn and garden.

marple-garden-1

‘Before’ photograph of the garden requiring a bit of TLC and some turf.

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Bank Chambers, Stockport, Sales Update

Bank Chambers Stockport.

We have just sold another apartment off-plan (the third of nine) at our Bank Chambers, Stockport development. Work starts on the conversion next week (3rd October 2016) so please keep an eye on these blog pages and our social media for project updates.

The CGI images below show the kitchen, living space and contemporary bathrooms.

thc002-_bank_chambers_kitchen_lo-res       thc002_bankchambersint_bathroom_hr    thc002_bankchambersint_apt7_hr

 

Stockport Market has become the latest place to be with its historic market hall and popular teenage market and is also becoming a foodie hotspot with new eateries popping up along the cobbled streets.

We are looking for a good quality restaurant operator to take the ground floor. It’s in a great location directly opposite the market hall, so if you know of a restaurant owner looking to expand ask them to get in contact.

 

Register Now For More Information

July Update-a Month in Numbers

 

As many of you know we started offering peer to peer secured loans in 2015 in addition to our equity investments.

Here’s a few stats to show how we are doing (correct as of 31st July 2016)

 

  • Total sum loaned                             £8,339,734
  • No. of loans made                           22
  • No of loan repaid                             5
  • Returns Paid to date                       £ 95,028
  • Av. loan period                                  10 months
  • Av. loan size                                       £379,079
  • Default rate                                        0%
  • Av. Loan To Value                            68%
  • Av. interest rate                               8.95%

To learn more about our secured peer to peer loans download our free guide here

You can always read more about our new peer to peer loans, equity investments and Property Crowdfunding by simply registering on our website

 

Register Now for more Info

What is FCA Regulation and Why is it Important in Alternative Finance?

A question put to us most days is whether The House Crowd is regulated by the Financial Conduct Authority?

The short answer is yes…

…but it is important to understand why this matters so much.

If you want to learn more you can refer to the exact wording dealing with our permissions in the footer of our website or the emails you receive from us. Or, you know, just read them below:

In respect of Equity Investments, The House Crowd Limited (FRN 711355) is an appointed representative of Prosper Capital LLP (FRN 453007) (“Prosper”). Prosper is authorised and regulated by the Financial Conduct Authority.  Neither the House Crowd Limited, Prosper nor any of their affiliates or group companies provides any advice or recommendations in relation to this document.  If you have any doubt about the suitability of any investment marketed by The House Crowd Limited, or you require financial advice, you should seek a personal recommendation from an appropriately qualified financial advisor that does give advice.

In respect of Peer to Peer investments, The House Crowd is authorised and regulated by the Financial Conduct Authority under interim permission number 665205 to conduct peer to peer lending activity in the UK.

Investments are only available to certain specified persons who are sufficiently sophisticated to understand the risks. Investments in property and unlisted shares carry risk and you may not receive the anticipated returns and your capital may be at risk.

Register Now For More Information

So Who Is the FCA?

The FCA has an important role to play in helping to safeguard people when dealing with financial matters, and how the FCA treats crowdfunding plays a crucial role in our business and the way we can operate.

Crowdfunding, as an industry, is still in its infancy. Since The House Crowd first began, the FCA regulation surrounding crowdfunding has evolved to create a regulatory framework in which the industry can flourish whilst protecting investors from being misled.

FCA Regulation

 

The FCA operates with three statutory objectives:

 

  • To protect customers
  • To enhance the integrity of the UK financial system
  • To help maintain competitive markets and promote effective competition in the interests of consumers

The FCA provides firms with a number of key principles that they must adhere to and we at The House Crowd always conduct business with these at the forefront of our minds.

The Financial Conduct Authority is responsible for regulating:

 

  • Loan-based peer-to-peer platforms on which people lend money to individuals or businesses in the hope of financial return in the form of interest payments and a repayment of capital over time
  • Investment-based crowdfunding platforms

Register Now For More Information

How Does FCA Regulation Impact The House Crowd?

In line with FCA regulation, we always ensure that all of our investments are presented in a way which is fair, clear and not misleading. We always endeavour to provide you with any relevant risks that may impact on the estimated returns.

FCA Regulation

Here at the House Crowd, we are building a team with a varied set of skills and qualifications, which ensures we can competently provide a full investment and financial pack for each of our listed investments. However, it’s really important to acknowledge that we are not investment advisors, and so it is essential that if you do not fully understand any information we present that you seek your own independent financial advice.

Why Must I Register With You In Order to Invest?

Anyone who wishes to access specific investment information on our website must first register with us and certify themselves as one of three acceptable types of investor. These are:

 

  • “Crowdfunding” (Elective Professional Investor)
  • “Sophisticated” Investor
  • “High Net Worth” Investor

There are more details about these given during your registration process.

The reason for this is that the FCA restrict the promotion of certain investment products to people who fall within those categories, to ensure that anyone investing with us fully understands the investment and associated risks, and therefore have full knowledge of what they are getting into.

That’s why, when you register on our website, we ask that you select the category of investor you fall within, and we ask you to confirm your understanding of the risks involved in crowdfunding.

Register Now For More Information

Once you have fully registered on our website, we can send you more information about the investments we list on our platform, and you are then free to invest, if you choose to do so.

I Want To Invest From Overseas. Can I?

If you are an overseas investor, you must check the regulations in your own jurisdiction to establish whether your government allows you to invest in UK based crowdfunded opportunities.  This is your responsibility.

Once you’ve established that you can invest with us from your country, you’ll need to provide two separate proofs of address, which can be a utility bill (not a mobile phone bill), or bank account statement, before you can invest for the first time. This is in order to comply with anti-money laundering (AML) legislation.

Conclusion

It’s important to note that this does not mean that there are no risks involved with crowdfunded property investment. As we reiterate wherever we can, there are risks involved with any kind of investment, and The House Crowd is no different. Whilst you can make a good return on your investment, there is always the possibility of loss. It is this that you must fully understand and be mindful of whenever you’re choosing how to invest your money.

We hope that this handy guide has helped to clear a few things up for you, but if you have any further questions, we are always happy to help. For any questions specifically related to compliance, you can get in touch directly with Charlotte, our Legal expert, by emailing her at: [email protected].

Where Can I Find Out More About FCA Regulations?

Well, funny you should say that! We have some useful links for you right here:

FCA Crowdfunding Review

FCA Policy Statement

FCA Discussion Papers

Alternative Lending: A Regulatory Approach to P2P Lending

Happy reading!

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April Update-a Month in Numbers

 

Last month we paid out a whopping £114,632 in returns to 492 investors.

We also raised an additional £1,660,000 over 3 projects and 133 more people are now earning a very healthy 9% a year on their investment.

If you have money festering in a bank account, perhaps it’s time to get your slice of the pie and put it to work with one of our fixed rate short term secured loans.

Alternatively, if you prefer a longer term deal that produces both income and capital growth you may want to look at one of our fully tenanted properties which have blue chip clients and should produce up to 9.5% in rental yield. The last one of these, HCP165 filled up in just one afternoon and the latest, HCP166, was 50% funded before we even launched it.

We are hoping for another record breaking (and sunny) month in May with more assured rental deals and have the exciting new development project at the landmark Bank Chamber (below) in Stockport launching this week.

HCDC005 ext

 

You can always read more about of new projects by registering on our website Register Now For More Information

Development updates

Regent Street Town Houses Newton Heath and Station Road Marple,Development Updates.

Both of our development projects are racing on and both have had the tilers in.

Granted they are at different build stages with the Regent Street Town Houses having the roof tiled and Station Road Marple nearing completion of the bathrooms but I am sure that you will agree from both sets of photographs they are certainly flying up compared to our last update.

The project at Regent Street will soon have the roof finished and judging by the speed the contractors are working it won’t be long before these super modern homes will have families moving in.

The photographs of the Station Road Marple project show that the rear extension is starting to really take shape with Velux windows ready to be fitted in what will be a huge open plan family space.
The bathroom tiling is looking great and as mentioned in the last blog the new attic suite certainly does make the most of the once hidden archway and lovely large space to get away from it all.

We are certainly looking forward to seeing photographs of the new development in Alderley Edge which is just starting-watch this space!

 

You can always read more about of new projects by registering on our website

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Marple Photographs (bathroom, attic suite, family room and feature arch)

marple pics 13.5.16

Newton Heath Photographs 

newton pics 13.5.16

You can always read more about of new projects by registering on our website Register Now For More Information