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spacedin

Property Crowdfunding Ramp - Bbc Moneybox

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@ 14:35

http://www.bbc.co.uk/programmes/b0713m2q

It was only until near the end that sanity began to be restored. Idiots advising young people to put money into property crowd funding to save up for a deposit?!! Utterly insane when they have a 15k tax free ISA allowance each year + lots of relatively okay saving rates on regular savings accounts from places like Santander and TSB. Anything but putting your money into something linked to property prices.

Edited by spacedin

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People advising young people to put money into property crowd funding to save up for a deposit?!!

Isn't that lose-lose? If prices rise your savings work out, but prices possibly rise faster so your savings are inadequate to provide a deposit. If prices fall your savings get wiped out.

Where do I sign?

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Isn't that lose-lose? If prices rise your savings work out, but prices possibly rise faster so your savings are inadequate to provide a deposit. If prices fall your savings get wiped out.

Where do I sign?

The whole point of it is that if prices rise, your equity rises with them. Buy-to-let, but with equity pooled rather than leveraged.

The principle is not unlike the invention of the original building society movement. Pool capital so someone gets a house, and eventually your turn comes round. The original launchpad for the slippery slope of leverage and HPI.

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The whole point of it is that if prices rise, your equity rises with them. Buy-to-let, but with equity pooled rather than leveraged.

The principle is not unlike the invention of the original building society movement. Pool capital so someone gets a house, and eventually your turn comes round. The original launchpad for the slippery slope of leverage and HPI.

Come on, porca. The principle is utterly unlike the original building society movement. Historical building societies used capital gathered from their members to build houses for their members. They did not to speculate on the possibility of the price of existing assets rising, (particularly as in the eighteenth century the idea that the asset would appreciate not depreciate would have been problematic). Further the original building societies were often terminating. I realise that you have this shtick about running a much needed counter-narrative, but surely there are limits.

Also, you are factually incorrect. One of the firm's mentioned, Property Partner, uses gearing too and are quite upfront about it.

I'm sure that these are excellent businesses etc. and that everyone involved is sincere and has their customers' best interest at heart etc., but crowdfunded BTL looks to me like a sign that we are edging up on the top of the market. Fingers crossed.

Edited by Idlewild

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Finally got round to listening to the programme, genuine laugh out loud moment for me at 20:20 when the interviewer points out the the Social Market Foundation's research was paid for by a "a crowd-funding website, isn't there a conflict of interest there?", reply "There isn't" :lol:

MSW nails the point about getting your money out and credit where it's due after the SMF chancer ducks the question the Beeb interview presses the point, and gets the response "Liquidity is something that will develop as this market matures". Could have said the same thing about RMBS chock full of high-LTV interest-only liar loans in 2003. How did that pan out?

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For anyone who believes in forever HPI, this must sound like a great idea! :rolleyes:

MSW pointed out the major problem in this idea, in the poor liquidity of this investment. Unless a market maker is going to play the middle man, there is never going to be enough liquidity in this to make it easy to pull out whenever you want.

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I think the general principle of index linking your savings to house prices, if you don't have one and don't have the savings to buy one, is on the fave of it a sound idea. As long as you are adding to it, affordability is inceasing whatever happens to prices.

Obvoously, you are only better off if prices increase at a greater rate than savings rates, and as such it represents a hedge, so you'd only want to keep a proportion of your savings in such a scheme according to your assessment of the risk of HPI.

But as MSW and forum members point out, liquidity is the issue and this isn't the first and probably won't be last of similar schemes (right back to the first shared equity schemes), and they all suffer from that drawback.

The principle, though, could have formed the basis of HTB done the right way.

Edit: damn phone suggested principal instead of principle without me questioning it.

Edited by Digsby

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Edit: damn phone suggested principal instead of principle without me questioning it.

Did the phone also suggest "fave", "inceasing" and "Obvoously"?

Since your use of "principle" was correct, I took in the meaning rather than notice the word when I read it. So, given that the word "principal" could very well have featured elsewhere in your narrative, my first reaction to that last line was to wonder if you'd "corrected" from right to wrong. I guess that's why I'd just've said "edit: typo" (or nothing at all) in similar circumstances.

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Did the phone also suggest "fave", "inceasing" and "Obvoously"?

Since your use of "principle" was correct, I took in the meaning rather than notice the word when I read it. So, given that the word "principal" could very well have featured elsewhere in your narrative, my first reaction to that last line was to wonder if you'd "corrected" from right to wrong. I guess that's why I'd just've said "edit: typo" (or nothing at all) in similar circumstances.

It's fair cop, and I was only 2 pints in at the time!

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It's fair cop, and I was only 2 pints in at the time!

:D

We all suffer typos. Yours is clearly that, rather than the illiteracy that's so painfully widespread online. It was just that last line that caught my eye.

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:D

We all suffer typos. Yours is clearly that, rather than the illiteracy that's so painfully widespread online. It was just that last line that caught my eye.

I could have at least used an apostrophe in front of "phone", though!

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