Bricklane, a business offering the first online Property ISA, launches today.
Supported and promoted by Zoopla, it will allow private tenants to save up for a home through investing in the property market.
Bricklane has been founded by two renters, Simon Heawood and Tom Cavill, and its team of five all rent privately.
Bricklane.com’s first REIT (Real Estate Investment Trust) launches this week with investments in properties in Leeds, Birmingham and Manchester.
The company has chosen these particular cities because their rental markets are performing so strongly.
An investment of £1,000 in Birmingham, Manchester and Leeds five years ago would now be worth £1,360, an annual total return of 6.3%.
The company’s second fund, which will invest in London properties, is set to launch early next year.
Savings invested with Bricklane track house prices and receive rental income on top.
According to the Office of National Statistics, the proportion of 25 to 34-year-olds owning a home dropped from 57% to 37% between 2005 and 2015. While renting, people find that house prices are rising faster than their savings, putting a home of their own increasingly out of reach.
Heawood and Cavill believe that Bricklane – which has attracted seed funding of £1.3m – will help address this problem.
Investors can start using Bricklane with just £100, and add monthly contributions from £50.
Comments (3)
Driving at 63mph won’t catch up to a car doing 69mph, the longer people save the further they fall behind
Small point the 5 year compound of 6.9%/annum is 39.6% not 36%, what happened to the additional capital growth? Additionally there is approximately 4% / annum (compound 21.66%) in terms of rental yield to add to the investment return.
Tell me if I’m missing something here but every time they buy a house in their fund and become the landlord aren’t three competing against first time buyers who would have otherwise have bought that house ? It’s just a property investor on steroids