The House Crowd
 | |
| Company type | Private limited |
|---|---|
| Industry | Investment |
| Founded | United Kingdom, 2011 |
| Headquarters | , |
| Products | Property Crowdfunding |
| Website | www |
The House Crowd is a UK property crowdfunding company.[1] It allows investors to buy shares in investment property from £1,000. As of March 2015, it had fully funded over 125 projects, raising over £10 million in the process.[2]
History
The House Crowd was set up in the UK in December 2011 and began trading in March 2012 and was one of the first UK property crowdfunding companies. It was launched at a time when, as The Guardian explains, ‘young professionals hoping to get a foot on the property ladder and people in their 40s or 50s hoping to fund their retirement through buy-to-let investments have had their plans thwarted by booming house prices.’[3] By June 2014, The Guardian reported that The House Crowd was buying ‘an average of one [property] a week.’[3] An article two days later by the same publication concluded that ‘the phenomenon of crowdfunding is booming.’[4] The following month, the Express reported that ‘[The House Crowd] has spent £5million buying and refurbishing 69 properties in the Manchester area.’[5] By March 2015, the number of fully funded projects had increased to 125, raising over £10 million in the process.[6]
Business model
Through crowdfunding, The House Crowd enables investors, in the words of the BBC, ‘to club together to buy a cheap house, do it up, then rent it out.’[7] As the article continues, ‘each house is bought through a special purpose vehicle and shares are allocated to investors.’[8] As The Guardian explains, The House Crowd then ‘manages the property and pays a regular dividend, with the prospect of capital growth as the value of the property rises.’[3] Merryn Somerset Webb of the Financial Times and the MoneyWeek championed the model stating ‘[it is] wonderful to be able to own small bits of residential properties across the UK without any of the palaver that usually comes with ownership.’[9] Robin Ash of The Times followed suit, claiming that model ‘[allows] priced-out aspiring homeowners to benefit from the rising market — without ever needing to fix a roof or call a plumber.’[10]
Risk and regulation
The House Crowd is authorised and regulated by the Financial Conduct Authority. As managing director Frazer Fearnhead explained to the BBC, ‘people's investment is protected by the bricks and mortar value of the property and if you want your money back you either need to wait for the property to be sold or sell your share to another investor. We cannot guarantee you will be able to find a buyer but everyone who has wanted to sell so far has managed to do so within a few days.’[11]
Returns
As Money Observer explains, an investor has two options ‘a fixed income-type product promising to pay between 7.5 and 10 per cent per year, [or] an equity set-up whereby investors take three-quarters of net profits.’[12]
References
- ^ Samantha Hurst (2014-12-23). "Speed of investment in The House Crowd increases by 800% |". Crowdfundinsider.com. Retrieved 2015-04-20.
- ^ "Crowdfunding | Property Investment | Property Crowdfunding". Thehousecrowd.com. Retrieved 2015-04-20.
- ^ a b c Gareth Rubin. "Crowdfunded buy-to-let offers a new way on to the property ladder | Business". The Guardian. Retrieved 2015-04-20.
- ^ Harriet Meyer. "Crowdfunding proving the perfect match-maker | Money". The Guardian. Retrieved 2015-04-20.
- ^ Jones, Harvey (2014-07-30). "Is following the in crowd the right route for savers? | Personal Finance | Finance | Daily Express". Express.co.uk. Retrieved 2015-04-20.
- ^ "Crowdfunding | Property Investment | Property Crowdfunding". Thehousecrowd.com. Retrieved 2015-04-20.
- ^ Alexander, Ruth (2014-06-06). "Investing in property... with £1,000 - BBC News". bbc.co.uk. Retrieved 2015-04-20.
- ^ Alexander, Ruth (2014-06-06). "Investing in property... with £1,000 - BBC News". M.bbc.co.uk. Retrieved 2015-04-20.
- ^ http://www.ft.com/cms/s/0/bff453da-be7d-11e4-a341-00144feab7de.html#axzz3TyWe2hM4
- ^ Robin Ash Last updated at 12:01AM, May 17 2014 (2014-05-17). "Get a foot on the property ladder for £500". The Times. Retrieved 2015-04-20.
{{cite news}}: CS1 maint: numeric names: authors list (link) - ^ Alexander, Ruth (2014-06-06). "Investing in property... with £1,000 - BBC News". M.bbc.co.uk. Retrieved 2015-04-20.
- ^ "Is crowdfunding right for you?". Money Observer. 2015-02-19. Retrieved 2015-04-20.