Property Moose is one of the UK’s largest Property Crowdfunding platforms. I’ve reviewed them in more detail in this review and they continue to be one of my largest personal P2P/crowdfunding investment platforms. I spoke with the founder, Andrew Gardiner, on a new type of loan investment they’ve just launched.
The Existing Investment Mix
Most of the investments to date on Property Moose are equity investments in individual properties (‘SPV’s). A few of the more recent investments were split into an equity part and a loan part. The equity investors took on more risk, but had the potential for higher returns. The loan part investors had a fixed rate of return but were first in line to get back their capital.
The New Loan Product
In future, some (not all) of the new investments will be split ~50/50 between an equity part and a loan part. The loan part will have: Read more “Property Moose Launches Lower Risk-Return Loans”
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.
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:
- Source good institutional property investments
- Aggregate funding from general investors like you and I to ‘buy a seat at the table’
- 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.
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.
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
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.
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%.
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.
Landbay is a peer to peer lending platform which specialises in Buy to Let mortgages. I’ve reviewed them in detail here, and produced an interactive data visualisation on their loan-book data last December.
Compared to other P2P lending sites, Landbay’s returns are lower: 3.43%-3.75%. The borrowers themselves only pay between 3.88% and 4.65%. This is due to the type of loans they offer: long term loans secured against BTL property. Loans are at a max Loan to Value of 80% with at least 25% margin of safety between the interest payments and rental income. On top of this, Landbay have additional provisions which allow them to step in and become a receiver of rent if necessary, and maintain a provision fund.
So in terms of the loans themselves, at least for a non-FSCS protected P2P lending site, it sounds quite safe.
I’ve had a few people contact me via the contact email for this blog. Their shared concern was that Landbay’s loan origination was too low, and that although the loans may be relatively safe, there was a higher platform risk with how they saw things were going. This post aims to understand these concerns and then try to find out what’s really happening at Landbay. Read more “What’s happening at Landbay?”
Today, the Chancellor Philip Hammond released his first budget. I’ve been through the key points to see what impact, intended or unintentional, it will have on the UK alternative finance sector. The short answer is, P2P Lending: not much, Crowdfunding: possibly negative. Read more “The Budget 2017 & Alternative Finance”
Saving Stream have since rebranded to ‘Lendy’ but the underlying platform remains largely the same as before. You can see the original review here:
Lendy (formally known as Saving Stream) offers investment in loans secured against property, with a max LTV (loan-to-value) of 70%. For borrowers (typically property related businesses) they provide bridging loans and development finance via the sister site Lendy Finance from 0.65% per month. They have grown quickly and are now one of the larger P2P platforms, with more than £266million lent out to date. Read more “Lendy Review (formally Saving Stream Review)”
Bondora is an Estonian based peer to peer lending platform that provides unsecured consumer loans. It was founded by Martin Rask, Mihkel Tasa and Partel Tomberg back in 2008 as isePankur and has grown to become one of the largest continental European platforms. Read more “Bondora Review”
What is Kiva?
Kiva is a non-profit organisation which provides micro finance loans to entrepreneurs in the developing world. It was founded in 2005 in San Francisco and has since funded around $950 million (£770 million) in loans. You lend in multiples of $25, but unlike most P2P lending sites you receive 0% interest. Borrowers may be charged interest by the local organisations that work on the ground (more on this below). Capital is at risk though historically defaults are low: the repayment rate is 97%. Once your loan repays you can either re-lend it, donate it to Kiva the charity, or withdraw the balance from Kiva. Read more “Kiva Review”