The 2015 UK Online Alternative Finance Report found that property is becoming a very popular sector – combining debt and equity it amounted to almost £700M in 2015.
1) Equity Property Crowdfunding:
Equity-based crowdfunding for property enables investors to acquire ownership of a property asset via the purchasing of shares of a single property or a number of properties.
2) P2P Property Crowdfunding:
Peer-to-peer for property lending is comprised of a variety of financing models and products: ranging from short-term (typically 12-18 months) bridging finance, to longer term (e.g. 3-5 years) commercial & residential mortgages and construction & development debt finance.
Investors understand property and are attracted by the opportunity to generate income in the near term. Combined with low interests rates offering poor returns on savings and property being considered a lower risk investment compared to early stage companies (it is unlikely that all asset value will be wiped out) demand is increasing.
With changes to the buy-to-let laws in the UK it has opened up the marketplace for residential property crowdfunding. Platforms such as Property Partner and Property Moose source UK properties to attract investors into-buy-to-let crowdfunds.
By the end of 2015, UK crowdfunding was worth £3.2 billion yet the portion of that going to property is still small compared to other markets such as the US.
While still in the early stages there are currently around 10 property crowdfunding platforms in the UK – most with a focus on buy-to-let. Commercial property, office buildings, retail shopping centres or high-end properties and even land remain untapped.
ShareIn are currently getting calls on a daily basis about people interested in setting up their own platform and have some great clients going live over the coming months.
We’ve been working hard to build a world class white label property crowdfunding platform that can be tailored to our clients own individual specifications. We think it looks pretty great! Have a little look yourself…
We believe that there is great potential in property crowdfunding – whether it’s residential, commercial property or land. With our White Label solution we can build a property crowdfunding platform quickly and in an FCA compliant manner.