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Angus Tookey

Posted 25/08/2017 17:07:44

Property investment branded 'better than a pension'

Property as an investment option has been branded a better and smarter choice than a pension, according to the Bank of England’s chief economist, Andy Haldane.

Haldane, who already owns two properties himself –in an interview with the Sunday Times –, said that he believes investment in property to be a far better bet for retirement planning than a pension:

“As long as we continue not to build anything like as many houses in this country as we need to ... we will see what we’ve had for the better part of a generation, which is house prices relentlessly heading north.” (1).

property investment branded better than pensions


The Office of National Statistics also seems to support this notion, purporting that UK wealth is indeed wedded to property (2). Britain’s obsession with property has sent the country’s net worth soaring to an estimated £8.8tn, an increase of 6% (£493bn) compared with the end of 2014.


Such is the stellar rise in property prices that the figure for the UK’s total net worth more than tripled between 1995 and 2015, an increase of £6tn, equivalent to an average increase of £87,000 per person, said the ONS. Factories and office blocks add a further £2tn to the value of UK property. (2)


__How we approach property __

Here at Yielders we have long recognised these links between property and wealth and similarly to Mr Haldane, we see the UK property market as a fantastic investment opportunity. Traditionally the only way you would be able to get involved in the UK property market as an investor would be through individual or joint ownership and therefore all of the pros and cons that come with ownership; you are in control of the entire yield, although you also have to manage the property, the tenants, perhaps employ someone to mange this for you, etc.


Property crowdfunding schemes, such as Equity Crowdfunding, which is the model we work on here at Yielders, allows you to circumnavigate many of the worries or issues you may have with traditional property ownership and investment. We call it Property Crowdfunding 2.0.


__Property Crowdfunding 2.0__

Traditionally, property crowdfunding businesses operate on a debt crowdfunding model – based on peer-to-peer lending. For Yielders this wasn’t good enough and heaped extra risk on to the individual investor, which we believe is unethical. Therefore we opted to build the Yielders platform around an Equity Crowdfunding model. Although as with all investments, there are still risks involved.


Still not satisfied, however, we wanted to change the traditional property crowdfunding model further. The vast majority of property crowdfunding websites and businesses do not assure 100% occupancy during the lease agreement on the investment property, Yielders do. Furthermore, all of our properties, which are presented as investment vehicles, are all pre-funded – ensuring that even less risk is shouldered by the individual investor versus the traditional property crowdfunding model, still employed by many of our competitors.


Sources:

2. https://www.theguardian.com/business/2016/aug/18/ons-data-shows-uk-wealth-wedded-to-property
1. https://www.theguardian.com/money/2016/aug/28/property-is-better-bet-than-a-pension-says-bank-of-england-economist

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