The Royal Institution of Chartered Surveyors (RICS) has predicted that savers could pump as much as £50 billion into UK housing over the next five years through buy-to-let crowdfunding websites, pushing up house prices.
“This sector, rather than the banking system, may well be the source of the next liquidity shock to the housing market. In this sense, the next boom could be equity, rather than debt driven,” said Josh Miller, a senior economist at the RICS, who has estimated that £50 billion could be funnelled through these sites over the next five years. Crowdfunding platforms, which have become increasingly popular, enable individuals to invest sums ranging from £10 to tens of thousands of pounds and in return receive a small equity stake or perks such as discounted goods. Specialised buy-to-let crowdfunding websites are barely on the radar of most savers, but the recent launch of a few suggests that this could change. The consensus among analysts is that interest rates are likely to remain low for some time, a situation that encourages people to look for alternatives ways to boost their savings. The platforms, which make relatively small housing investments possible for the first time, could prove to be particularly popular with would-be buyers and retirees who want to invest in property but cannot afford to buy a home outright. Property Moose, which is run by a descendant of the Cadbury chocolate family, has a minimum investment of £500, while Property Partner, which will launch in the coming weeks and is backed by the founder of Betfair, will allow investors to put as little as £50 into a property.