According to new research from Shojin Property Partners, increasing numbers of millennials are investing in property crowdfunding to get a foot on the property ladder.
Shojin Property Partners has seen a 20% increase in millennials aged 18-30 investing in property crowdfunding projects since launching the platform launched last year. Millennials now account for almost fifth of all people who invest in property this way through the firm.
The largest group of crowdfunding property investors are aged 30-39 (44%), followed by 40-49-year olds (23%). After the age of 49, the number of crowdfunding investors declines with age.
Crowdfunding is proving attractive to millennials as they are able to invest in property from a relevantly low amount, without the need for large savings, or deposits. Unlike earlier generations, many young people don’t want to be bogged down by a mortgage so early in their lives.
Jatin Ondhia, CEO of Shojin Property Partners comments: “With interest rates so low, millennials are losing money, keeping it in a bank due to the rate of inflation. This, combined with out-of-reach property prices, is driving an increase in 18-30 year olds investing in property crowdfunding.
“This age group will increasingly embrace crowdfunding, as they are early adopters of new and emerging technologies and are keen to try innovative ways to invest. Being able to invest smaller sums of money is also very attractive to millennials, enabling them to dip in and out of property. They have potentially large investing power and crowdfunding offers them an opportunity to spread risk.
“We have developed a variety of crowdfunding projects, allowing investors to make a minimum investment of £5,000. These projects provide a hands-free investment, without the tax and legislative burdens.
“Our new buy-to-let crowdfunding product enables landlords and investors to come together and buy into a small portfolio of residential property for rental purposes, sharing the income and capital growth. This standard buy-to-let product, offers investors income, plus a share of any profits when the property is sold, for a blended return of 5% to 10% per year, over five years.
“Our further two buy-to-let products are a mix of debt and equity finance and will typically offer lower returns than the core development equity product, but with a lower risk. Our capital growth equity product, offers only capital growth but no regular income, with target returns of nine to 12% per year over five years.
“Our third buy-to-let product is an income-only, mezzanine product, secured by a second charge against the property. Investors will receive a fixed quarterly income, but none of any future capital growth on the property, with target returns of 4%-6% per year.”
Shojin Property Partners has raised £21m since inception and since launching their crowdfunding platform in September 2017 have attracted over hundreds of new investors including high-net-worth individuals, family offices and institutions.
Shojin Property Partners was founded by Jatin Ondhia, who spent 12 years at UBS optimising large institutional portfolios and Sandeep Puri, a qualified quantity surveyor who has worked for several large homebuilders including Redrow and Wimpey.
For further information, please call Gareth Bain on 0203 871 5959 or visit www.shojin.co.uk. Shojin Property Partners is authorised and regulated by the Financial Conduct Authority (No. 716765). Shojin Property Partners is a trading name of Shojin
Financial Services Limited (company number 09697161) and the registered office is at Golden Cross House, 8 Duncannon Street, London, WC2N 4JF.