Zoopla’s brand new ‘Invest’ channel offers up a slice of the UK property market – for less cost than your monthly council tax bill.
Here at Zoopla, we’ve launched a brand new Invest channel. It means anybody who can lay their hands on just £100 can get exposure to the UK property market.
This means would-be first-time buyers trying to keep pace with rising house prices with their deposit savings can at least put themselves 'in the game' in the meantime.
It's also a boon for existing homeowners, keen to get a slice of the UK property market but not so keen on the rising expenses and red tape around being a landlord.
So the big question...how are we doing it?
First off, we’re offering access to the first ever online property ISA, courtesy of provider, Bricklane.com. It’s effectively a stock and shares ISA into which you will be able to save up to the standard £15,240 (2016/2017) a year.
You can open the account with as little as £100. There’s no upper limit although the tax-free benefits are capped to your annual ISA allowance. You’ll also be able to transfer across any existing ISA balances when you open the account.
Once paid in, your cash will be pooled with that of other investors and held in special fund (a combination of a ISA-eligible online platform and a Real Estate Investment Trust or REIT).
This fund will be used to purchase buy-to-let homes in some of the UK’s most major cities including Manchester, Birmingham and Leeds – although currently not London.
Your investment then tracks movements in these property values – and receives rental income on top to boot. And because the account is ISA-eligible, both your income and equity gains will be paid to you free of tax.
You’ll also get up to £50,000 protection on your money via the Financial Services Compensation Scheme (FSCS).
Bricklane.com's co-founder, Tom Cavill says: "Property has provided consistent returns for the last 10+ years but, on the flipside, has become increasingly difficult to access without huge sums of money and time to manage.
"A property ISA gives savers access to property returns, tax-free...we're seeing more and more customers transferring their poorly-performing Cash ISAs from the 'big banks' to Bricklane.com's Property ISA.
Head over to our Invest channel to find out more
The second category you’ll find under our new ‘Invest’ tab is peer-to-peer lending. This ever-popular industry puts lenders’ cash directly in touch with borrowers and – by cutting out the middleman bank or building society – is designed to offer both parties an all-round better deal.
Here, we’ve teamed up with Landbay, a peer-to-peer provider that takes your money and lends it out to residential property investors in the form of buy-to-let mortgages (statistically, the lowest risk of peer-to-peer lending).
Your investment – which again, can be as little as £100 – is chopped up into little pieces and spread across lots of different mortgages. The properties these loans are secured against are based all over the country, which means your risk is completely diversified.
Peer-to-peer firms are authorised and regulated by city watchdog, the FCA but it’s important to know your funds won’t be protected under the FSCS.
That said, many peer-to-peer providers carry a ‘provision fund’ which will pay out if things go wrong. At Landbay, this fund equates to around 0.6% of the amount of money lent out.
Zoopla’s chief executive, Alex Chesterman said: “Property investment has never been available to the masses before in this way. And for those looking to get onto the property ladder or saving towards a new purchase, the ability to ensure their investments keep pace with the property market is essential.”
INFORMATION IS CORRECT AT THE TIME OF WRITING AND IS PROVIDED AS GUIDANCE ONLY. IT DOES NOT CONSTITUTE FINANCIAL ADVICE.
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