Taking the decision to invest your money in something other than a bank or building society savings account is an appealing prospect at the moment. There is barely a bank on the high street of any town or city in the United Kingdom that will offer anything more than a low savings rate. What’s more, many ISA and ‘higher rate’ savings accounts are limited in their scope and, in some cases, only available over a long savings period.

A search at Moneysupermarket.com for cash ISAs returns savings accounts that offer no more than 1.65% AER, which would mean after one year, you’ll have made around £8. The reason the return is this low is largely down to the fact that there’s virtually zero risk. You know you’re going to get your money back plus the £8. But is that £8 over one year really allowing your money to work hard for you?

Where Else are People Putting Their Money?

Searching for alternative places to put money, many earners are finding that a new investment phenomenon, crowdfunding, is an exciting place to turn, especially in property markets. A well-chosen investment in a property can also potentially offer far greater prospects of growing an investment, far more flexibility and far fewer limitations than a high street savings account. However, crowdfunding also comes with significantly more risks for potential investors than a relatively safe savings account. You could potentially split your investment capital between different properties or even split your commitment between crowdfunding and other types of investments entirely.

Crowdfunding and Risk

As with any form of investment, there are considerations to be taken into account and the rewards need to be balanced up against the risks, and although the crowdfunding concept allows risk to be shared, the same considerations must be taken into account. It’s important to remember that there’s risk involved, but with this comes potential for a higher return on your money.

Am I Actually Buying a Property with Crowdfunding?

Practically speaking, property crowdfunding investments involve investing in a business that owns the property being invested in. In this respect, it can be far more likened to a business investment where the business’ profits are gained as a result of rental income.

There’s more information about this here http://www.propertymoose.co.uk/app/faq/

Profit Follows Risk

The mantra of the economist is that profit follows risk, and this is very much true of investments made into business plans through crowdfunding. There are many footnotes and cautionary tales – and as the disclaimers go, not every investment has a happy ending. If there were an investment that did, it would be oversubscribed to the point of being inaccessible anyway. So, instead of going for a meagre return on a safe savings account, crowdfunding offers the opportunity to potentially do something far, far more interesting with your money albeit at a greater risk.

The ups and downs of investment makes it prime for people to contribute their advice albeit in a manner that makes it seem somewhat philosophical.

It goes without saying that we all have different experiences with investments, but a look back at the words of wisdom of respected figureheads gives us an insight into their experience and allows us to learn from others’ mistakes.

“An investment in knowledge pays the best interest”

Benjamin Franklin

Benjamin Franklin, one of the founding fathers of the United States and the man also quote.

This quote however refers to Franklin’s belief that your greatest investment should be in your knowledge and understanding and that your greatest tool in becoming successful is the knowledge you possess.

When considering an investment, learn as much as you possibly can to ensure you’re able to consider all the options available to you. You can’t foresee a problem you didn’t know existed.

“How many millionaires do you know who have become wealthy by investing in savings accounts?”

Robert G Allen

Whilst at first this quote seems to be discounting savings accounts as an option, it’s much more useful to look at it with a different perspective.

The essence of the quote is that to make huge gains, you often need to increase the level of risk, which would typically involve coming away from savings accounts in favour of other investment options.

It’s important to remember that even though moving your money into riskier investments could be potentially profitable, there’s also the chance of losing all or some of your investment.

“The individual investor should act consistently as an investor and not as a speculator”

Ben Graham

This quote refers to the rational, objective reasoning that should be applied to every investment made. This is contrary to making emotional decisions perhaps on a whim. Speculation and investment are not one and the same.

“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.”

George Soros

This quote requires no introduction or explanation and certainly carries a lot of validity.

A career in the United Kingdom takes time to build up, unless you are more than a little fortunate. In fact, a significant proportion of UK graduates are now being obliged to do a stint of unpaid internship work before signing an employment contract. When you finally do get yourself onto the career ladder, progress may still be slow – and despite the rising prices of property across the country, investing in property or other ventures is a popular choice for individuals looking to see returns on their earnings in the meantime.

1) Low Returns on Savings Accounts

Perhaps the most immediately obvious reason to invest is the state of Britain’s savings choices. With the Bank of England keeping base rate interest rates at their historic low of half a percent, there are few savings accounts that will offer you anything more than a paltry return. Even where savings can produce returns, they tend to be long-term plans and the returns you can get over the long term should be far, far higher than what most UK banks are offering.

2) Entrepreneurial Spirit

Then there is the entrepreneurial aspect of putting any savings you might accrue into an investment rather than a savings account. Progressing along a career path means many things. It is about a higher quality of living, a job that gives back as much as possible, a growing set of skills and a direction for life. Investing can help you to gain an auxiliary set of experiences which may very well come in useful in later steps of that career.

3) Enjoyable, Engaging and Stimulating Experience

Career steps aside, an investment can be a hugely fulfilling adjunct to the nine to five of a main job. Putting savings into a property investment can be a hugely enjoyable, motivating and exciting endeavour. The investment should see a solid return over time, but the whole process can be a stimulating one to go through – and a good practice run for buying your next property.

4) Investing is Now More Accessible

There is a modern phenomenon that presents a perhaps even more interesting investment opportunity, and that is crowdfunding. The chance to participate in a funding program of this type can be an extremely interesting and enjoyable way to invest, and can possibly see good returns as well.

Needless to say, all of these reasons for investing must ultimately come back to the potentially profitability of investing over simply saving. Until interest rates rise considerably, this remains, we believe a compelling reason to invest; once you start to do so, the financial possibilities of further investment could soon become apparent.

The 1990s was a decade that took us swiftly into the modern computing era, with the Internet now becoming accessible to people without lab coats and mathematics PhDs. The modern mobile phone started to take shape and become realistically ‘mobile’. It was the era that gave us the notion that there can potentially be value in things that can’t actually be touched.

The dot com bubble was a prime example of this where huge amounts of investment was poured into the Internet sector only to be lost when the bubble effectively ‘burst’. According to Investopedia, the Nasdaq lost 73% of its value in the crash.[1]

Intangible Investments

In contrast to intangible investments, property investment is quite different. To begin with, there’s something you can put your hands on. The bricks are real, the plasterboard is real and real things have a value, even when a market collapses. When the global recession took hold in 2008/9, entire markets collapsed and financial models failed to translate into reality. The world economy was on its knees but the bricks and mortar properties at the centre of the crash were still standing and they will remain standing when the economy is back at full steam ready to deliver a return on investment.

This knowledge is being acted upon by some investors according to an article submitted by New York financial journalist, Kathleen Kiley, to online resource Business Insider which reads:

“…investors are looking to preserve assets, even if it means forgoing returns. They are moving into property investment, which, although not necessarily providing the highest return…offers high stability.”[2]

When the dot com bubble burst in the late 90s early 00s, there was little left. Little of value to sell in insolvency procedures. The investments were made in ideas, concepts and hopes of gaining market share. When the market failed, there were offices full of thin air.

Property and The Natural World

If we step back from acronyms and financial models for now and observe the world around us, we can safely say there can only be a finite number of buildings. This is dictated to us by not only by local planning rules but also the laws of physics! In our view there maybe a point in time where no more buildings can be built which could then lead to a fixed supply.

Combine this potentially fixed supply with, in our view, increasing demand and the most basic economic theory could suggest that this could lead to a potential increased rental value or market purchase price. That’s an argument in favour of property investment. This potentially increasing demand is fuelled by, in our view,increasing net migration into the UK which is something elaborated on in this blog post.

Property is Tangible, But is it Accessible?

Whilst property is something that traditionally couldn’t be considered a small investment, the new crowdfunding model is going a long way in making the property investment market somewhat more accessible.

This accessibility is taking some power away from those with high purchasing ability and back into the hands of those would like to add property to their investment portfolio without consolidating the risk in one place. The ability to spread your portfolio over a range of investments is often fundamental to smart investing.

Interested in Finding Out More About Investment Opportunities in the UK?

Property Moose, (www.propertymoose.co.uk/app) is a new crowdfunding platform focused solely on property investment. Investors are provided with a choice of properties that can be self-selected and invested in from £500 - helping spread investments across numerous properties and build a more diversified property portfolio. Through crowdfunding, Property Moose are giving people the opportunity to benefit from the potential returns on offer.

Property Moose Limited is registered in England and Wales (no. 08522544) and is an Appointed Representative of Sapia Partners LLP, which is authorised and regulated by the Financial Conduct Authority. Neither Property Moose Limited, nor Sapia Partners LLP provides any advice in relation to investments and you must rely on your own due diligence before investing. Please remember that property prices can go down as well as up and that all figures, rates and yields are estimates only and should not be relied on. If in doubt, please seek the advice of an independent financial adviser.

The United Kingdom, Why Has This Always Been a Great Place to Invest?

Although the UK is a relatively small sovereign territory on the edge of Western Europe, London as a financial hub is held as one of the most important in the world and receiving a rating of 784 in the Global Financial Centres Index in March 2014 ranks London in second position behind only New York[1]. This economic strength has in our view led to the UK being an excellent option for both overseas and domestic investments.

Investment options are never made based on one factor alone, here are a few reasons other investors’ portfolios often feature UK based investments.

Growing Population

According to The Guardian,[2] the UK population is set to grow steadily over the next 20 years which serves to not only increase the size of potential markets but also diversifies it leading to new opportunities.

This population growth can largely be attributed to immigration to the UK and as the European Union gradually expands this effect is only likely to increase. According to the BBC in an article[3] published in February 2014, “net migration increased to 212,000 in the year to September 2014” which is a rise from “154,000 in the previous year”. At this rate, demand of housing is likely to outstrip supply.

An increase in population requires additional housing which is why population growth can be an important statistic for those looking to make property related investments. Assuming a simplified economic model where new housing cannot keep up with inward migration, property values tend to increase as demand outstrips supply.

A Strong, Global Currency

The Pound sterling has long been accepted as a global currency, which is useful in that it removes another element of instability for investors to factor in. A well-respected, generally viewed as a secure currency that isn’t subject to high levels of inflation and political manipulation and can be exchanged easily on currency markets can be a tick in the right box for investors.

Political Stability

Whilst sometimes political change can be for the better, an abrupt change of government can come with changes to legislation, fiscal controls and in some cases monetary policy, all of which typically alter the state of the economy and as such the potential return on any investments. This header also includes threats due to civil war or military occupation, an issue being seen first hand by those with investments in eastern Ukraine.

An article[4] published by Bloomberg on its website relating to the political crisis in Ukraine, quotes Chris Weafer, Senior Partner at Macro Advisory in Moscow who believes that “Ukraine is a no-go area for any investment from any foreign investor right now”.

Low Risk of Natural Disaster

Natural disasters such as earthquakes and volcanic eruptions can be very disruptive and certainly have an effect on local economies. The UKboasts a very stable geological advantage through being in an area that is not at high risk from either perils. It’s more likely that the rain and clouds will keep investors away!

Interested in Finding Out More About Investment Opportunities in the UK?

Property Moose, www.propertymoose.co.uk/app is a new crowdfunding platform focused solely on property investment. Investors are provided with a choice of properties that can be self-selected and invested in from £500 - helping spread investments across numerous properties and build a more diversified property portfolio. Through crowdfunding, Property Moose are giving people the opportunity to benefit from the potential returns on offer.

UK census records reveal that the population has increased by a record 7% in the last decade to over 63 million. That is nearly equivalent to adding a city the size of Manchester each year.

As an investor, or potential investor, these figures should tell you something. Not only has there been a surge in demand for property right across the country, but, that trend is likely to continue in the next 10 years.

And here’s another interesting fact. The UK is more crowded than any other country in the European Union and the latest government estimates say around 232,000 new properties need to be built each year just to keep up with the demand. That means great news for property investors looking for less risk and greater returns even when other sectors of the economy are struggling.

So whether you’re a new or experienced investor, you need to start thinking seriously about investing in the

UK property market and here are 3 reasons why:

Nearly 20% of the population will be renting with-in the next 5 years

That’s the highest number of renters ever in the UK. And it’s not surprising considering how the banks are reluctant to lend at the moment. Even 10% deposits are way too high for many first-time buyers, further pushing up rental demand.

For a buy-to-let investor, that’s a gold mine that you should tap into, quickly. This huge demand for rental property continues to drive rental values ever higher with less voids meaning greater returns for investors.

Record levels of population growth

As mentioned earlier, the UK population has increased by a record 7% in the last decade and government forecasts also reveal that households are set to reach 28 million in the next 20 years. So that is an average increase of about 250,000 households each year.

Interestingly, single households are also set to grow by about 3.2 million, and account for 20% of all households.

What does this mean for investors? Simple, over 1.1 million rental properties will be required for all these people by 2016.

Better Investment than money in the bank or shares

Rising rental yields reveals that buy-to-let investment is where your money and efforts should be at the moment.

Having money saved in the bank will bring you little return considering the current interest rates and inflation.

Equity investments also offer the potential of great returns. However, they are very high risk; and if you have a low risk appetite, then stay well clear of them.

In March 2013, in the annual budget, the Conservative Chancellor, George Osbourne, announced a new scheme designed to help first time buyers enter the property market.

Recently lenders have been very cautious with first time buyer mortgages, requiring bigger and bigger deposits from borrowers. Homebuy allows a first time buyer the chance to buy a property with a smaller deposit, as the government will provide part of the deposit themselves. This reduces the risk from a lender’s perspective and allows some movement in the property market – which is good for the economy.

Opposition leaders have expressed dismay at the scheme saying it will cost a huge amount of money and provide impetus to prices, returning the market to a housing equity fueled property bubble.

Property prices in the UK: Will prices increase?

There is a significant in some areas of the country. If first time buyers can’t buy then second time buyers can’t sell. This gums up the whole process. If there are more transactions then prices tend to increase, especially in the middle and top end of the markets.

Historically, first time buyers have been forced to stay at home or rent. This has in turn forced up rents so providing good returns for property investors.

The view is Homebuy may well create a temporary lift to market activity, and this will increase the supply of available homes.

However the key issue for first time buyers is the current lending rules of the mortgage lenders. Rules have never been stricter and have got even tougher under the Homebuy scheme

Prices are increasing for other reasons. Huge demand for private rented property is forcing up rental returns and property investors are queuing up to benefit. Overseas investors see the UK property market as a safe haven so they have also been buying in the large cities. These are the main reasons for the prices increasing. Throw in an increased number of transactions and the next 12 months could be very interesting if you are looking to buy a property investment.

Can I benefit from these increases?

From an investment point of view it has rarely been a more exciting time to invest. Borrowing rates are low for buy to let, and property prices are increasing by over 15% a year across the country

No longer do you have to take the risk yourself. Companies such as Property Moose, www.propertymoose.co.uk/app, will allow you to invest in the UK property market from as little as £500.

Using the Crowdfunding format you are able to buy shares, for as little as £500, in a property related project. It may be a purchase to buy a property to rent or a renovation for a quick sale and profit.

This means you can enjoy the likely rise in your investment returns as the property prices increase without the need for huge costs, a mortgage, a valuation, stamp duty or even finding a tenant. This is all done for you as part of the package. You can also enjoy vastly reduced risk too, as all risks and returns are shared amongst all the Crowdfunding shareholders.

So.To benefit from the government’s clear plan to kick start the property market use Property Moose to reduce the risks and deliver the return before it is too late.

Recent research is showing the returns on buy to let property investment

are continuing to out perform other traditional investments, in terms of returns and risk management. Demand for rental property is growing by 10% a year as 60% of the public no longer expect to ever buy a house of their own.

Statistics show that the average tenant would have to save for 23 years to raise the size of deposit needed to obtain a mortgage without any outside help. As such, the level of home ownership is currently lower now than at any time in the last 25 years.

Is it a good time to buy?

Here are 4 key reasons why it is a good time to buy:

1. Huge, growing demand for rental property. There is no sign that this will stop. It has never been harder to obtain a mortgage and population growth and immigration continues to grow. This means more demand, higher rental values and less voids – the perfect mix!
2. Real returns are outstripping traditional savings returns. Southampton is the top of the league for average rental yields, at 7.82% and an average rent of £901 pm. 5 other cities exceed 7%, for instance Manchester and Nottingham. London is around 3.4%. This is, of course, an average, and the rental returns targeted by properties acquired through Property Moose (www.propertymoose.co.uk/app) target annual gross rental returns of 10 – 20% for its student and social housing investments. To put this into context, as of today, the highest bank rate for a fixed term cash deposit was under 5% - but, your money has to be locked away for 5 years!
3. Capital growth. With the recent fall in property prices and a lack of mortgage availability, property has, in the last decade, never been so cheap! But, property prices are already starting to grow at significant rates with several boroughs of London already predicting growth in excess of 20% next year. Investing through Property Moose (www.propertymoose.co.uk/app) allows investors the chance to grab a piece of this growth without having to rely on mortgages to obtain properties – meaning the best deals can be made and the cheapest properties sourced.
4. Low Risks. All investments carry risk and it is impossible for someone to tell you that investing in property carries no risk. However, investing at as close to the bottom of the market as you can, in an area with high demand, in a property you can add value too, is a recipe it is difficult to see can fail. Simple. Or is it? That is the risk. But, by ensuring you use the right professional advisors, the right tradesman and do the right due diligence, these risks can be significantly reduced, and in my opinion, all but extinguished.

Can I do it myself?

The truth is, that many people do. However, how many of these people are truly successful property investors is a difficult thing to estimate.

The usual sources, banks and building societies, remain hesitant to lend and while rates are very low, at sub 2% in some cases, buy to let mortgage rates remain high and incur very high charges.

Then it’s the question of picking the right property as it is highly likely you can only buy one. As with anything, putting all your eggs in one basket is not advisable, especially on an investment front.

Companies like Property Moose (www.propertymoose.co.uk/app), launching in the summer, allow investors to take advantage of their expertise, professional advisors and contacts in the property world to invest in properties from only £500. Property Moose then pools these investments to buy, renovate and rent the properties – sharing the profits amongst the investors. Budding property investors can spread the risk through several properties, instead of gambling on just one meaning lower risks, higher returns and a more secure investment for all.

UK property is performing well. Prices are increasing throughout the country, especially in, and around London. In April prices rose by 1.1% on average and, in some places, there have been 25%-30% increases over the last 12 months. After several years of difficult trading the future is looking very bright.

Why is this?

Many Overseas investors are fleeing the instability in their own countries, caused by continued recession and austerity measures. In France huge increases in the tax rates have caused people to move money out of the country. Pressures in Greece, Spain, Portugal and Cyprus are well versed but investment money is moving to more secure and low risk areas.

UK house Prices are rising because demand for property is also rising. UK investors are buying more and more properties to let as large numbers of tenants cannot obtain mortgage finance of their own. Rents are increasing and borrowing costs are low.

Also the UK government has announced a Homebuy scheme where first time buyers can be helped to buy their first homes. The opposition government feel that this step, alone, will create a property bubble as it will lead to a huge increase in properties ,historically hard to sell ,being snapped up.

How can I invest?

It is possible to obtain finance in the UK though this is very expensive and the administration process is lengthy and cumbersome. You can expect to be asked for accounting information, personal banking references and checks on your employment in your own country. This will be costly in terms of money and time.

Bringing cash into the country is easy but you may be liable to transfer taxes from your own country. Currency rates are also a key issue. Solicitors will need a detailed understanding of the source of your funds.

One option, increasing in popularity, is crowdfunding. This is where an overseas investor can buy shares in a scheme that is set up to buy property for investment purposes. There are no huge currency issues, or tax issues, as it is possible to invest as little as £500 a share. Companies such as Property Moose, www.propertymoose.co.uk/app, can invest in properties to let out or to renovate to make a quicker return. The risk of a poor investment is less as your share is one of many.

The key benefit of Crowdfunding is it is a very quick, and cheap, way of entering the UK property market. No administration delays or costs from lenders or solicitors. No one picking through your personal financial background. It means that your shareholding is earning an investment return from day 1, not day 150. With prices increasing quickly time may be of the essence and it will ensure a better return the quicker you move.

Property Moose is able to deal with investors from all over the world once basic money laundering checks are complete. Allowing people to enjoy the inevitable returns from UK property over the forthcoming years.

I need expertise in the market?

Property Moose has years or property experience behind it, in different sectors and property types. This ensures the best chance of investment success for the fund and more return for your shares.

Invest in the UK Property Market

Recent statistics suggest the housing market is improving. This week the Halifax report a 2% increase in house prices over 12 months, but, more importantly a 1.1% rise in April alone. This, of course, is an average across the UK. If you know were to look, there are several areas predicting grown of up to 20% next year alone – and this is without any renovation increases.

Are prices really rising?

The main increases have been in London. Prices in Kensington, Notting Hill and Bayswater are recorded as rising by 10% every 6 months. There is a shortage of properties over £5m in value and estate agents are reporting significant interest throughout the central areas.

The key issue is London property is seen globally as a safe haven for foreign investors. A weak pound, higher tax rates in France and the ongoing economic problems in Italy, Greece and Cyprus have led to a huge demand across Europe as people see London property as a reputable investment opportunity.

As prices continue to soar in London the knock on effect is improving price performance in Oxford, Reading, Cambridge and as far west as Bristol.

Experts suspect that inner city developments in Manchester, such as Media City, Birmingham and Leeds will also become targets for the cash rich Europeans.

Also the government has announced more funding for their package of help for first time buyers, Home buy. This will allow more people onto the housing ladder and cause prices to rise across the country in the bottlenecked part of the marketplace allowing the housing ladder to move again freeing the trapped second and third time buyers. The opposition parties in the UK are criticising the increased funding as that may cause a new housing boom. Perfect for investors!

Is it easy to borrow money?

In a word. No.

Mortgage advances were down by 1% in the 1^st quarter of the year. Brokers report a toughening of lending criteria, and though rates are low for occupiers and therefore the mortgage costs are affordable, borrowers have to have unblemished credit histories and large deposits, with banks making up the profit on higher rates for buy to let mortgages. The type of property accepted for buy to let applications is reducing and the administration fees are rising to an average of 1.25% of the mortgage amount.

How can I invest in the UK property?

Unless you have a large deposit and funds readily available to support your mortgage application you will need to consider alternatives to the traditional ways of entering the property investment world.

Companies such as Property Moose (www.propertymoose.co.uk/app) offer a new and innovative way to become a landlord and benefit now from the potential surge in prices and the increasing demand for rented properties.

They use crowd funding as a way to pool sufficient funds together, split amongst many investors. This can mean you can be part of the housing investment sector for as little as £500 .The company will invest in traditional buy to lets, but also projects such as property development providing returns over short, medium and long term periods with investment periods of between 1 and 5 years. One of the other unique features about investing through Property Moose is the liquidity of your investment. When investing you receive shares in a specific limited company set up to acquire that property so, if you need your cash, out, you can sell your shares to other investors through the Property Moose website. Easy.