London property has long been the pinnacle of investment portfolios worldwide, but a slowdown in the capital’s market is prompting a shift in attitudes. For areas of the UK which have failed to grab investors’ attention in the past, large cash injections and a shift in government policy have helped fuel immense residential and commercial growth.
Traditionally, property in these regions would have been snapped up by buy-to-let investors, but changes to stamp duty and increasing swathes of red tape are forcing investors to look elsewhere.
Property crowdfunding has benefited from this slowdown, with many new platforms establishing themselves over the last three years. Compared to traditional property investment, property crowdfunding allows investors to spread capital and risk across a number of projects. This investment model is based on frequent, reliable returns rather than speculative capital growth.
Stockport is a prime example of an emerging area that offers investors high returns and impressive capital growth on crowdfunded developments.
Seven miles south east of Manchester city centre and eight miles from Manchester Airport, the commuter town boasts direct rail services to Manchester, Liverpool, Birmingham and London. With a £42m transport interchange under construction and £1bn being invested across the retail, residential and commercial sectors over the next five years, Stockport is establishing itself as a regional business hub.
Over the past year, property prices in the town have increased by 15.9 per cent, and are likely to continue rising as it enjoys ongoing investment. Woodford, Bramhall and Hazel Grove, all areas within Stockport, are among some of the wealthiest suburbs in the UK, and over the next five years, 1,100 new homes will be built to cope with increasing demand. These properties will range from newly-built detached family homes to refurbished commercial facilities in the town centre – abundant due to Stockport’s industrial past.
This presents a prime opportunity for property investors, with individuals involved in a local crowdfunded development enjoying returns of 10 per cent per annum.
Indeed, the north of England as a whole offers superb opportunities for property investors. Newcastle, Sheffield, Liverpool and Greater Manchester all have exciting, large-scale regeneration projects underway, helping tackle a severe housing deficit in the region.
In South Yorkshire, employment increased by 76,400 between 2010 and 2013. Over the same time period, employment across the whole of France rose by 66,000. Massive investment in infrastructure is expected over the next few years, with HS2 predicted to cut journey times to London by 45 minutes and the world’s longest road tunnel anticipated to shave half an hour off the journey to Manchester under the Pennines.
House prices are predicted to increase by 16.5 per cent in Yorkshire over the next five years, and outside investors are increasingly drawn to the area by relatively low prices compared to the South East. Yields of 7 per cent and more are common in the region, offering landlords double the rental yield that may be achieved in London.
If you’re still set on investing in London, peer-to-peer (P2P) secured lending is a strong investment option. This is a shorter-term commitment than equity crowdfunding, with investors enjoying up to 9 per cent returns a year. If you’re just starting out with P2P, it’s important to ensure that your chosen platform operates at a conservative loan-to-value ratio, protecting your investment against a fall in the market.
One of the fundamental rules of investing is to diversify and spread risk. Therefore, it makes sense to spread your investments across both equity and P2P crowdfunding, benefiting from the tax breaks afforded by both.
It is easy to remain in your geographical comfort zone, but investigating investment opportunities in other areas of the country can bring substantial financial rewards.