For years London and the Home Counties have been a property investor’s paradise. Those shrewd enough to buy a property in Hackney in 1997 would have seen a 753% increase in its value over the past 20 years.
With such rampant property inflation in recent years the market has cooled off fast, and the buy-to-let squeeze following extra government regulations makes the prospect of a property portfolio close to home less and less appealing.
So, discerning investors with an eye on the horizon are now looking to the north of England for properties that offer low purchase prices, high rental yields and the promise of impressive capital growth.
And they’ve got every reason to be optimistic. This year house prices grew faster in the North than the South, jumping 3.3% in June compared to the national average of 1.1%, according to Nationwide. Add to that the fact that house prices are much lower, meaning investors have a smaller initial outlay, and you start to see the potential of this untapped market.
One particular hotspot for property investors is the West Yorkshire city of Leeds, where the average house price is £154,700 compared to £488,700 in London.
With three universities in Leeds, the annual student population hits a staggering 75,000 people meaning many houses in the city’s student heartlands have been tenanted continuously for decades.
For investors this means access to many ‘proven performer’ Leeds properties that have yielded strong returns for a minimum of ten years.
Student housing might bring up thoughts of unreliable tenants and dirty digs, but property crowdfunders offer a way to potentially reap the rewards of homeownership without the pain of being a landlord.
Many investors are looking to property crowdfunding to remove the burdens of buy-to-let or diversify their portfolio. The process works by tens or hundreds of investors buying shares in a property and then receiving a proportion of rental income and their portion of any capital appreciation from the house price.
UOWN offers investors shares from just £20 in ‘proven performer’ properties that have yielded strong returns for a minimum of ten years. This means investors are receiving at least 6.4 percent returns from rental income and expecting around 21.6 percent returns over the next five years from house price growth according to JLL.
Unlike other crowdfunders UOWN gives returns from month one even before the property is fully funded.
Once fully funded, properties are managed by local experts Parklane Properties, which has over 40 years’ experience in student lettings.
UOWN’s first fully-funded property, a four-bedroom semi-detached house, racked up an impressive £189,000 from investors between April-September 2017. Overall 92 people invested in the house with an average contribution of more than £2,000 per investor.
UOWN was founded by brothers Shaan, 26, and Haaris Ahmed, 23, who graduated from London School of Economics and Oxford University respectively, and who saw an untapped market.
Shaan said: “We established UOWN to challenge the old order of property investment and open up access to what, for many people, has been a closed shop. We provide peace of mind for those thinking about buy-to-let, but concerned about the hassle and expense it will bring.
“Leeds is a vibrant city to live and work in with lots of inwards investment – for property investors it’s an absolutely untapped market.”