Published on September 15th, 2014 | by admin0
Can CrowdProperty shake up construction industry?
Yet another new platform enters the thriving UK peer-to-peer lending market, as CrowdProperty, the brainchild of five property market professionals, announces plans to secure £20 million in funds during its first financial year. Sounds ambitious? Yes, but then what do you expect from an industry where risk-taking has often yielded fantastic dividends.
CrowdProperty’s role is to generate loans between individuals with £500 minimum to put in, and professionals that need financing for various property projects. That might be anything from a home renovation to a block of flats to a shopping centre, with differing repayment rates for 80-100% loan-to-value investments. The company takes a 3-5% arrangement fee from the borrower, and aims to provide returns of 5-11% per annum to the investor.
In terms of security, CrowdProperty operates much as a larger financial institution might, with a first legal charge against the property asset in question. Every project is carefully monitored along the way so that investors can have confidence that their money is being spent wisely.
Where the new company seeks to stake its claim, and which will likely be of great interest to investors and borrowers alike, is in the team behind it. Bringing with them vast amounts of experience and knowledge (over 70 years combined), means that they can effectively judge every project to ensure only those with the best chances of success attract investment.
The UK construction industry has been in the doldrums for years despite successive governments announcing plans for house building and infrastructure projects. Confidence remains low among companies, and therefore banks are less willing to lend, meaning many talented professionals are unable to bring their dreams to reality, and many homeowners can’t restore their properties.
If CrowdProperty’s strategy proves successful then this could be a useful way to regenerate the industry, and of course provide a handsome return for savvy investors too!