Property Crowdfunding in the UK: 5 Reasons why Real Estate Crowdfunding is hot right now

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At the moment real estate crowdfunding in the UK is flourishing and attracting serious and well-standing sponsors and investors who wish to maximize their profits and diversify their portfolios. Property Crowdfunding in the UK has great potential to flourish even further despite the fact that it does not occupy the biggest percentage of the market. From the point of sheer size, the UK crowdfunding industry is considerably smaller in terms of capital volumes compared to the US and China. According to the IPF research, at the moment, property crowdfunding in the UK accounts for 3.4% of the global market. However, the UK property market is extremely promising as it continually shows stable value increase and good HPI results. According to the official statistics from the UK House Price Index Summary in January 2018, the average house prices in the UK have increased by 4.9% in the year to January 2018.

As for the real estate market itself, it is no wonder that so many investors flock to the UK real estate market to make solid investments. However, they stumble upon many problems on their way when they try in invest in the market directly. For instance, investors need to undergo a lot of paperwork and bureaucracy problems, when they try to buy an apartment. Some of the investors need to wait several months before they finally get approved to buy the property they want. The process is tedious and time-consuming. And even after the investor purchases the property, it does not mean that the problems are over. A lot of investors encounter maintenance problems after finalizing the buying process. For example, the bought property can be left in poor condition or with some broken furniture. The utilities are very often off as well, with no gas and water supply running. As a result, investors need to pay further for the maintenance work and for the renovation, which only adds up to the expenses.

Moreover, there can be a lot of problems finding the right realtor or company which would provide reasonable pricing and good offer without adding up exuberant fees for their services. The commission that the company may charge for finding a good property may be huge in today's market. It is especially true if you invest in the UK property from abroad and do not know good local real estate agencies who are trustworthy and have a good reputation. Due to the differences in the real estate market which varies in each country and has different HPI you may also not know what the reasonable price for the property is and whether or not you should invest in a particular house or an apartment. As you can see, the climate of property investment in the UK on one's own without any professional help can be hostile and not bring the expected market value.

Considering all the above-mentioned problems of the solo investment, more and more investors are turning to new investment solutions. The most famous and well-acclaimed one is probably the real estate crowdfunding, which is a perfect way of raising money for businesses so that investors can access the desired property in a much easier and faster way than the traditional system.

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Here are 5 main reasons why house crowdfunding in the UK became so popular:

  1. The opportunity to use limited funds. The minimum investment in the property crowdfunding is much smaller than the traditional investment tradition. There is no longer need to take a loan from the bank to afford to make a real estate investment. Real estate investment used to be a privilege available only for the upper class. Now the middle class can easily make investments in the real estate market and receive the projected long-term benefits. The investment itself is no longer a luxury, it`s a good life choice available for people who value financial stability.
  2. Changes in the European legislation, consequent housing crisis, and demographic challenges allowed real estate crowdfunding to grow even further. This is especially true for the United Kingdom where there were many major political changes in the last years, the biggest one being the Brexit. In after-Brexit England, there is a national necessity to double the number of new homes that are provided every year to meet the ever rising demand for the real estate. It is no wonder that the UK is the leader in the property crowdfunding and it is also considered to be the most active adaptor of the crowdfunding in Europe.
  3. Property crowdfunding in the UK is a perfect way to diversify the investment portfolio. Investors can access and participate in several projects, which considerably lowers the investment risks. Crowdfunding platforms make it their job to provide the diversification opportunities to investors. For example, with RealtyBundles, our crowdfunding platform, you may make only one investment, but get shares in a group of properties. The result – you diversify your assets and reduce your risks in cases of market instability because you invested in several markets.
  4. High returns from the real estate. For example, the estimated returns from a group of property in the UK Property Bundles from RealtyBundles is 40% in 3 years, the highest estimated returns among all the existing bundles on the platform.
  5. Better liquidity. With property investment in the UK, you are able to manage your own shares, thanks to their liquidity. Investments can be sold much quicker than property.By purchasing the share. you may know for sure that it will appreciate with time.

Considering all the benefits of real estate crowdfunding in the UK it is no wonder that RealtyBundles decided to create a Property Bundle in this highly lucrative geographical area. Wonder what property bundles are? Property bundles are groups of real estate properties, located in different countries of Europe. These bundles are grouped together in an investment package.

The RealtyBundles is unique in its model as it connects the investors to good real estate opportunities with reasonable pricing and does it without unnecessary high commissions. The RealtyBundles is basically a “many-to-many” type of business with the “make-ready” solutions. We are connecting the investors to the opportunities without overpricing. These opportunities include attractive properties offered by local REA.

Learn more about the opportunity to invest in the UK Bundle on our crowdfunding platform and about the advantages of investing via our platform. You can request more information by clicking the button

 

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Sources

  1. https://www.gov.uk/government/publications/uk-house-price-index-summary-january-2018/uk-house-price-index-summary-january-2018
  2. http://www.ipf.org.uk/resourceLibrary/real-estate-crowdfunding-gimmick-or-game-changer-november-2016-report.html