RateSetter Review

RateSetter is a British peer-to-peer lending platform that provides loans to households and businesses. Since launching in Autumn 2010 they’ve lent around £2bn, making them one of the ‘big 3’ platforms (RateSetter, Zopa, Funding Circle).

RateSetter are a ‘hands-off’ platform with no individual loan-part management/selection: you just choose an investment product and rate. For this reason it’s an easier platform to start off with for P2P lending beginners. You choose an investment product and rate of return that you would be happy to lend at, then wait for the lending market to match your offer. Choose a rate that is too high and your money will be sat there without earning interest. Choose a rate that is too low and miss out on higher returns! Read more “RateSetter Review” →

A First Look at Huddle Capital

Huddle Capital first popped onto my radar at the end of March with this post by Cooling_Dude on the P2P Independent Forum. They were offering a special promotional deal for the first 100 investors, which on first glance appeared too good to be true: 20% cashback on investments for the first 100 investors. However, when you think about it, say an average of £1,500 invested for the first 100 people comes out to £30,000 total spend in cashback, not that bad for a marketing spend to launch your new platform and iron out the problems. Read more “A First Look at Huddle Capital” →

ArchOver Review

ArchOver is a peer to business lender that specialises in secured and insured loans against Accounts Receivables (AR). Since their launch in 2014 they’ve funded around £30 million in loans. They state an enviable track record of no missed payments or defaults whilst offering high interest rates of 6% to 8.5% to their lenders. Read more “ArchOver Review” →

Flender Review

Flender is a new UK/Irish peer to peer lending platform with a social slant. For a business or consumer to borrow on Flender they first have to successfully raise funds from their friends or customers before opening up the opportunity to the wider public. Flender hopes this will help to reduce defaults, and do it in addition to standard checks run by other P2P lending sites. Current lending opportunities offer interest between 8% and 11%, though borrowers can set their rate as they like. Flender makes its money from a 2.5-4% margin on consumer borrowers or a 3.5% fee to businesses after a successful funding raise; there are no fees for lenders. Read more “Flender Review” →

Property Crowd Review

Property Crowd is an ISA-friendly real estate crowdfunding platform that offers investors a chance to invest in “institutional grade” property deals from £5,000. They’ve been around since 2014, but relaunched with ambitious plans as part of Global Alternatives at the start of 2017. Those ambitious plans (a ‘cross-border property trading exchange’) were what first piqued my interest in Property Crowd, and I set up a call with one of their co-founders Charles Tan to understand more. Read more “Property Crowd Review” →

Property Partner Review

Property Partner is the UK’s largest Property Crowdfunding Platform with over £50 million invested to date (versus ~£10 million Property Moose or ~£43 million on The House Crowd). I’ve been investing with them since July 2016: so perfect timing to report on performance amidst the post-Brexit property gloom. I’ve also used The House Crowd and Property Moose, so this review is based on my experience in relation to the others too.

Property Crowdfunding platforms allow investors to buy shares in property investments and benefit from ongoing rental income and house price increases. Properties are held within an SPV (Special Purpose Vehicle) which is a specially created UK LTD company to hold the asset. Read more “Property Partner Review” →

Abundance Investment ISA Q&A

Abundance Investment are one of the first established P2P platforms to offer a fully functioning IF ISA. They focus on renewable energy projects like wind turbines or solar farms. Looking down a list of their completed investments, they generally target between 5% and 12%. Read more “Abundance Investment ISA Q&A” →

CapitalRise Q&A

I first came across CapitalRise when researching Innovative Finance ISAs: they were among the first to offer a working IF ISA product. From what I saw, CapitalRise target property deals in the the high end luxury London market. This is an example of one of their latest investments, a £19million development opposite the Royal Courts of Justice in London:

I reached out to Uma Rajah, the CEO of CapitalRise, with some questions about their platform, the ISA and the investments they offer. Read more “CapitalRise Q&A” →

Landbay Review

Landbay is a peer-to-peer lending platform which provides loans to buy to let investors. Founded in May 2014,  it offers up to 3.75% returns secured against property with an average loan-to-value of 66.73% and a further reserve fund totalling 0.6% of outstanding mortgages. It is definitely a ‘hands off’ platform: you deposit your money, assign it to either a fixed term or tracker product, then just come back whenever you need to withdraw money. Read more “Landbay Review” →

Brickowner Review

Brickowner is a recent addition to the UK Property Crowdfunding market. Like more established platforms The House Crowd, Property Partner and Property Moose, they allow investors to buy a share in individual property investments.

Brickowner’s focus is on institutional investments: they buy a seat at the table on large, higher return property investment deals that would traditionally only be offered to institutions or high net worth individuals. They then offer smaller shares in this to retail investors from a minimum of £100.

Key Facts:

Expected Annual Returns: 8+% net return
Sell Out: At investment maturity (2-5 years on average) or else through the Brickowner secondary market when it launches.
Minimum Investment: £100
Innovative Finance ISA: Selected future investments on the platform will be ISA compliant
New Customer Cashback: £50 for £1000 investment, see cashback page for more details.

The Model: Institutional Investment

Brickowner aims to look at retail property investment from a different angle and decrease the fees charged. Many of the most lucrative property investments are larger investments managed by the best and most experienced property asset managers. Retail investors are unable to source and access these opportunities, often investments are prohibitively expensive and can require a single investment of £50-250k, making them ‘uninvestable’ as far as the majority of the UK is concerned.

Brickowner firstly works to source these managers and opportunities. Secondly they act as an aggregator: by combining the funds of smaller investors through the Brickowner platform to meet an investment target large enough for the property manager to accept.  In this way they allow investors who wish to invest smaller amounts to access and invest in property investment opportunities which they wouldn’t otherwise be able to.

Once the secondary market is launched investors will be able buy in and cash out when needed, rather than locking themselves into the entire investment term. I asked Brickowner about the secondary market: they told me that the functionality is already built but they are waiting for higher volumes before they launch it.

So in short, their model is:

1. Source good institutional property investments
2. Aggregate funding from general investors like you and I to ‘buy a seat at the table’
3. Offer additional liquidity (eventually) through a secondary market

In exchange for this they charge a 3% upfront fee, and a 1% ongoing management fee.

Brickowner Fee Comparison

Platform	Fee on Initial Investment	Ongoing Fee	Exit Fee
Brickowner	3%	1% (of total investment)	0%
Property Moose	5%	10.5% (of ongoing income, +VAT)	15% (of profit)
The House Crowd	5%	~10% (of ongoing income)	~10% (of profit)
Property Partner	2% (+0.5% stamp duty)	10.5% (of ongoing income, +VAT)	0%

Fees given to the best of my knowledge as of 13th March 2017, with no clear data for The House Crowd. Please confirm with individual platforms before making an investment.

One difference is how Brickowner charge ongoing fees. They apply an ongoing fee of 1% of total investment rather than a percentage of ongoing rental income. To try to compare, let’s create a hypothetical £100,000 property with 6% yield:

1% of total investment is £1,000 per year.

10.5% (+20% VAT) of rental income is £100,000 x 6% x (10.5% x 1.2) = £756 per year.

Expected Returns

Brickowner aim to deliver a total net return of 8%+. Their first property investment projects a 10% annual return over 2 years, and the second investment a projected 8% annually over 3 years.

In these two investments the net dividend yield was around 6% with the remaining return from capital growth.

User Experience

Once you sign up, you view new investments from the properties tab, which gives you a basic overview:

From this you can click into a more detailed page with a background to the investment, a background and the financial breakdown.

The projected dividend stands out in the bottom left hand corner. However, it’s not clear from this overview what the expected capital returns are, you have to do some mental arithmatic or click into the detail to see it. The numbers do not appear to be compounding

Key Questions

I asked Gareth Ship, the COO of Brickowner, a few questions that are often raised by potential new investors:

Q: How are new investments announced?

All investments will be announced via a “coming soon” notification on the platform, with a further property introduction to all users via e-mail, we have also raised interest with a number of bloggers, so we expect some announcement there when a property peaks peoples interest!

Q: Deposits/Withdrawals: is there a fee? Can you deposit with card?

Brickowner charges no fees for deposits or withdrawals, our fee structure is relatively simple:

• A 3% up front platform fee for all investments.
• A 1% annual fee for management administration and running costs for each investment.

Fees are charged on invested equity. Users can deposit via debit card and bank transfer. For our secondary market (when it launches), there will be a fee of 0.5% passed on, charged to Brickowner to register the share transfer.

Q: What happens if Brickowner Limited runs into financial difficulty?

There are a number of measures in place to protect investors in case Brickowner falls into financial difficulty:

• All un-invested money is kept in a separate account from the assets of Brickowner in order to separate and protect our customer’s money.
• All invested money is held by a separate company which can be managed by a separate financial manager in the case that Brickowner stops trading.

Q: Is there a tax statement function that I can use to easily provide to HMRC?

We are planning to give users access to this function by May this year, to support our investors tax returns. This extract will download as a pdf for submission on the HMRC portal.

Q: Can foreign investors use Brickowner or is it UK residents only?

Whilst Brickowner only markets to UK investors, we allow foreign investors to join the platform apart from US investors- due to legal complexities.

Q: What is the experience of the management team?

Fred Bristol: Spent the last 7 years investing in & managing property in East Anglia & East Midlands, with a 14 year track record of property investment & management.  Fred founded Brickowner in 2015.

Tobias Stone: Previously founded Newsquare Innovation- a company that implements innovation tools to build ecosystems in specific sectors of technology, and to accelerate innovation within those ecosystems.  Clients including Bayer, NHS England & the Government of Estonia.  Toby is successful entrepreneur and has successfully delivered/mentored and advised a number of successful start-ups.

Maulik Sailor: Maulik was the founding CTO of Landbay, the P2P platform now backed by Zoopla. He has previously build P2P platforms, payment wallets & ecommerce market places.

Summary

The Good

Brickowner joins the property crowdfunding market post-Brexit with a strategy they hope will bring investors returns of 8% or more. In a show of confidence they successfully raised £100k through Seedrs back in July and are almost doubling their valuation in a second funding round taking place as I write.

They’re focusing on a corner of the market which they feel is straight forward and lower-cost: offering a share of traditional institutional property deals to general investors. I think this take on property crowdfunding is smart: once they’ve built a pipeline of opportunities, it’s easier to scale the business through buying a larger share of institutional deals than sourcing new BTL houses.

Brickowner offer a generous £50 cashback for new customers on a £1,000 investment, which would increase their expectation of first year returns from 8% to 13%.

The Bad

They’re new, so there’s little in the way of user reviews or historical earnings after fees. Net returns of 8%-10% sound great but it relies on the experience of the Brickowner team. It’s a similar story with the secondary market, you have to trust Brickowner that they will release this soon.

Institutional deals are potentially harder to understand than the buy-to-let investments seen on other property crowdfunding platforms.