An increasing number of investors are rushing to invest in the house-share market through crowdfunding sites, according to Smart Property, which manages boutique house shares for young professionals in the north of England.
The company points to its own recent success as evidence of growing demand from investors, after raising more than £300,000 in 15 days when it floated its company shares on crowdfunding portal CrowdCube.
Smart Property’s directors Andy Graham, 29, and Nick Morris, 31, say they were overwhelmed at the response from investors, which will now allow them to expand the company with more properties in Leicester, Manchester, Nottingham and Sheffield.
“We expected to have interest, but we were truly astounded at the number of people wanting to invest,” said Graham. “It just shows that the house share market is a very attractive prospect for anyone wanting to invest in property at the moment. We were completely oversubscribed and shot into overfunding after just six days, before reaching our upper funding limit after a further seven days.”
He added: “The number of young, professional house sharers is rapidly increasing in the UK, due to soaring property prices which prevent young people from getting on the property ladder, or even from renting their own flat or house.
“It’s a booming sector, and more and more people clearly want to get involved.”
Around 4.5 million houses, or 20% of properties in the UK, are now let out to house sharers, and estate agent Savills predicts that the house-share market could account for an addition 1.1 million properties by 2021.
With rents for private properties continuing to grow, some 43% of 18 to 24 year-olds in the UK are now living in a house share, according to Knight Frank. Tenants renting with Smart Property pay an average of £375 all inclusive for a double room.
Yet while affordability is still a key issue, house share tenants’ demands have increased, according to Smart Property.
The company claim that 30% of 18 to 24 year-olds move between rental house shares to ‘upgrade to a nicer property’; 75% prefer a furnished property, and 62% prefer to roll their bills up into one easy payment.
Graham added: “We are unique in offering landlords guaranteed rent, while offering tenants high-tech heating and utilities; view today, move tomorrow procedures, and the ability to unify the rental cost into one single monthly payment that includes super fast broadband, Sky TV and semi-serviced living - which might include cleaning services or laundry collection.”