New research from property crowdfunding platform Property Moose suggests Brits aren’t paying close enough attention to interest rates.
Property Moose, the real estate equity investment platform, has revealed that a mere 28% of UK adults are confident that they know what interest rate they're earning on their savings. A further 30% of those surveyed expressed doubt as to what their current interest rates are. In light of such apathy, the crowdfunder spies an opportunity for property based investment platforms.
The result comes from a Property Moose-commissioned One Poll survey of 2,000 UK adults. The survey also reveals that 38% of UK savers have never once moved money from one financial institution to another. 9% said that they had never shifted savings around due to a belief that all rates are largely the same, while 19% said that it was too much of a logistical hassle.
The Property Moose poll also posed the following question to savers: “If you had money to invest, which of the following would you mostly likely choose to invest in?” Property topped the list with 52% of the vote, with stocks and shares coming second with 27%, and peer-to-peer lending scoring 5%.
Bear in mind, however, that the One Poll survey was carried out on 13 June 2016, prior to the UK’s vote to leave the EU. Subsequent movements in the markets could precipitate some nervousness among savers, were the poll to be carried out today. Grainger plc, a FTSE 250 residential investment vehicle, has seen steep falls in its share price since the referendum. As a larger, closed end vehicle, Grainger is widely seen as a sound proxy for residential property.
Unperturbed by these developments, Andrew Gardiner, founder of Property Moose, declared: “Even amongst the uncertainty post Brexit vote, one thing we can glean from analyzing the performance of the housing market in previous times of uncertainty and recessionary pressures, is that UK residential housing has proved to outperform almost every other asset class over a 10-year investment term. Those who have acquired property during these times have enjoyed the benefits of the subsequent upturn in demand that follows.”
Gardiner seems to be singing from the same hymn sheet as the team at Index Ventures-backed Property Partner. Discounts as wide as 15% (to the most recent independent valuation of a property) are currently available for investment on the Property Partner platform. But the platform is simply treating this as an opportunity to add to its secondary market. A new bidding functionality is set to launch within the next few weeks. In the immediate aftermath of the referendum result, Mark Weedon, head of research at Property Partner, said: “… between 1973 and today, the UK residential market has seen no five-year period with negative total returns, after accounting for both rental income and capital gains. During periods of volatility like this, investors tend to prefer assets which can provide a reliable income, combined with lower risk to preserve their wealth.”
So the brains behind the UK’s real estate investment platforms aren’t worried, but will investors be?
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.