While ever increasing London property prices have been attractive to investors, rising house prices have seen people priced out of the housing market. According to the House Price Index for Greater London, the average price of a home in London has almost doubled since 2009, to just over £600,000, in that time showing a huge 11%, year on year increase1. A shortage in housing stock means that there is still a very competitive market; despite the introduction of higher stamp duty for second home owners in April, the market has stayed buoyant. Again, all of this could potentially be promising news for investors, but what about those that have ended up locked out of the market?
London is considered to be one of the greatest cities on Earth. According to the 2016 Worldwide Cost of living survey, it is also one of the most expensive cities to live and work in2. A housing boom, coupled with low-interest rates and limited pay growth have pushed a whole generation of people into rented accommodation. This ‘Generation rent’, who can’t afford ever increasing house prices and mortgage deposits, ironically end up paying far more in rent.
With many people under 30 unable to take the first step onto the property ladder, the UK is experiencing an ‘intergenerational wealth divide’. It’s not only young people who are affected, with many in their 40s and 50s renting, throughout London. Simply put, investing in a home or making money in London property has become unattainable for many. Property crowdfunding platforms, such as Crowd with Us, aim to cover this gap, enabling potential investors to club together and share an investment property. It can be prohibitive to save a large deposit for a mortgage but the crowdfunding model is likely to offer an alternative means of raising property funds.
There is a way that you could potentially make money on the London property, and even build a portfolio of investments that could one day help you to afford a deposit for a home of your own. Crowd with Us want to share the opportunity of investing in London real estate; to make having a piece of London affordable for everyone. With an investment from £1000, you could own a piece of London property. By pooling resources with other crowdfunders you can invest in bricks and mortar as well as earning rental income on your share.
1 http://swanlowpark.co.uk/assetpricecalculator.jsp 2 http://www.economist.com/blogs/graphicdetail/2016/03/daily-chart-4