Property Moose announced last week that they are suspending their secondary market at the end of the month, February 28th.
Property Moose were my favourite property crowdfunding platform, and it still seems quite recent that they added the secondary market in the first place.
They put the reason partially down to new regulations, MiFID II and GDPR. GDPR, which is coming in in force this May, gives users the right to request access to their data, to rectify it or to delete it. I don’t know much about MiFID, but I imagine that to operate a secondary market you’d have a bunch of requirements to store customer data for tax, anti-money laundering etc etc. So perhaps this added more hassle than it was worth. I can only speculate.
With the introduction of MiFID II and GDPR, and the uncertainty they bring in the regulatory sphere (not to mention the unknown impact of Brexit on our regulatory position and that of other financially regulated firms [MiFID II is an EU Directive]), it has become untenable to continue to offer the secondary market as a service without significantly increasing the fees payable by members.
Property Moose have now removed the 2% buyers fee until the suspension of the market on the 28th.
Some people are quite eager to get out, as evidenced by lower selling prices. If you are open to buying there could be some bargains to be had. Most of the shares were originally £10, £100 or £500, so if you see one offered at £9.50 that’s a 5% discount off the original price.
I have a relatively large amount (for me) invested in Property Moose and one of the strong points was the secondary market. I do really like their business model though, and perhaps they are just the first of many companies who will deprecate services in the wake of GDPR and the hefty fines it brings with it.