With house prices rising faster than the average salary in almost a quarter of all UK cities, getting on the property ladder is harder than ever. As estate agents in Walathamstow, we see first handing the challenges facing first time buyers.
According to Halifax, the number of areas where house prices are rising faster than earnings has gone up from 73 out of 384 a year ago to 108 out of 384. Unsurprisingly these areas are concentrated in London, the South East and the South. Alarmingly, the average London home now costs 16 times the average Londoner’s salary.
So, how do we get round these apparent obstacles? There are ways, thankfully. Crowdfunding is one of them and it is fast becoming a viable option for many would-be home buyers.
A new report from the independent Social Market Foundation argues that property crowdfunding offers young property buyers between the ages of 25-35 a golden opportunity to buy property. It’s believed that crowdfunding not only facilitates the deposit sourcing process, but also boosts the supply of new homes by providing equity funding to small and medium-sized house builders.
Crowdfunding works well if you want to buy a property either with a group of friends and live in it, or with a group of strangers and rent it out via a buy to let mortgage. When a property is advertised on a crowdfunding site, investors can put as little as £50 in and in turn each will earn a return on the rental income. Essentially, what crowdfunding sites do is issue shares in properties to investors in a similar vein to company stocks. Investors are able to gain income from the property and access to any future capital gains in proportion to their ownership. Buyers can sell their shares at any point if they find other investors interested in buying. In areas where property is scarce this is almost always guaranteed.
There are of course risks as there are with any approach to buying property. Buying via crowdfunding sites could secure lower rents than expected, house prices could drop and the crowdfunding sites themselves often reserve the right to get rid of properties and return net proceeds to investors, should they deem it an appropriate course of action.
Waltham Estates, is a family run Estate Agents based in the heart of Walthamstow. We can sell or let your home in Leyton and Walthamstow, we offer guaranteed rent schemes, so you never have to worry about missing your mortgage payments, should you choose to rent your property.When it comes to Property management in walthamstow, we offer an all inclusive service. Find out more