Value Nomad

November 17, 2018

British Pearl Review (Real Estate Investing Platform)

British Pearl Review: check our post about one of the newest real estate investing platform in the UK, available to overseas investors

Are you considering investing in a real estate platform in the UK? Check our the opportunities available in our British Pearl review below.

British Pearl Review

British Pearl Review: Overview

There is no doubt that the internet is changing how we save and invest money. That also applies to real estate, with numerous real estate investing platforms and real estate crowdfunding sites. British Pearl is one of the newest options available, with great opportunities for those looking to invest in UK’s real estate market.

British Pearl currently offers two in which users can earn money while investing on the platform. One of them is by buying shares of a property and the other is as a loan investor to a property. All properties available on the property have been pre-funded and therefore customers to not face any completion risk.

How to Open an Account at British Pearl

Opening an account on British Pearl is a rather simple procedure, and it is opened even for those who are not British nationals or residents. You will need an email to sign up, and the account is instantly opened.

Bear in mind that you will be required to pass the KYC requirements in order to deposit or withdraw funds from your British Pearl accounts. That is required in every real estate investing platform currently in Europe (more on that below).

Click here to open an account on British Pearl

We also had the opportunity to discuss some of the main aspects of real estate investing with Ali Celiker,  CEO and Founder at British Pearl.

Hello, could you tell me more about British Pearl business model, and how it differs from other companies in the segment of real estate crowdfunding?

British pearl is the only property technology platform that enables investment of equity and debt in a single property. We have competitors that offer debt products (Landbay, LendInvest) and those who offer equity investments, (Property Partner, House Crowd) we are the only one doing both.

British Pearl is the one stop shop for property investment, allowing people to invest as a Loan Investor and become a mortgage provider to our properties, or invest as a shareholder and become a part owner of the property.

Shareholders receive monthly net rental income and a share of any capital appreciation on exit. Loan Investors receive fixed monthly interest and benefit from a charge against the property. British Pearl loans are also ISA eligible.

Unlike our competitors, we also have a trading exchange with an open API putting us in the best position to build an active and liquid resale market in both property shares and property loans.

The platform is not to be confused with crowdfunding sites which are often associated with collective funding of charitable projects or start-up businesses, or Peer to Peer (P2P) sites which often enable lending to businesses or individuals. Crowdfunding and P2P sites tend to match lenders or funders with borrowers or start-up businesses. While those opportunities can often be attractive and safe, by allowing funds to leave the custody of those platforms, into projects or businesses outside of the platforms’ control, they represent a different risk profile to British Pearl. Funds we raise are into SPVs which we manage, the funds never leave our stewardship and we are held to the highest regulatory standards by the Financial Conduct Authority.

What are the minimum criteria for an individual to invest in British Pearl?

Before being able to invest, you must first go through our accreditation, id verification and anti-money laundering screening process. The minimum investment amount is £100 but you can of course invest more.

Are you open to overseas investors? If yes, from which countries?

Yes we are open to overseas investors. The onboarding process for overseas investors is a little more time consuming in terms of meeting our ID verification and AML compliance requirements. Additionally, overseas investors are responsible for satisfying themselves that investing in UK property through British Pearl is legal in their country. This includes complying with any governmental or regulatory requirements and other applicable formalities. Overseas investors are also responsible for understanding their domestic tax position when investing with British Pearl. We are not in the business of giving tax advice and we make clear our tax responsibilities in the FAQ section of the website.

Which requirements do you need from new investors?

New investors are required to pass ID Verification and Anti Money Laundering checks.
As we are directly FCA authorised, we are required to ensure they understand the risks involved in investing through British Pearl. To do so, we categorise investors as a Certified High Net Worth Investor, Self-certified Sophisticated Investor or Certified Sophisticated Investors. These three categories are collectively known as “retail investors” in financial services. The process is straightforward and the site gives all the information you may need.

Are you planning to expand your portfolio of properties to estates outside the UK?

Should we achieve the goals we have set of the UK, we will then turn our attention to expanding into other territories.

What fees are charged from customers, when depositing or withdrawing funds from the platform?

There are no charges to UK investors investing through the UK banking system by bank transfer or debit card. Our bank may charge for international transfers and where they do, the charges will be clearly indicated in your investor account. UK investors can easily withdraw funds from their investor account, 24 hours a day, for free.

What risks are involved for investors using British Pearl?

Compared to other peer to peer platforms there is relatively little risk when investing with British Pearl. There is no risk of third party defaults, or properties not completing (on other site, investments may not reach full funding and so deals will disappear). This is because we source, pre purchase and manage the properties.

Risk to British Pearl.

Each property investment is owned by a special purpose vehicle (“SPV”), which is a UK Limited Company incorporated for the “special purpose” of buying an investment. This is done so that each property investment is held completely separately from every other property investment and also from British Pearl. Share Investors own the SPV and Loan Investors lend to the SPV. Should anything happen to British Pearl as an organisation, the ring-fenced SPV’s will not be impacted financially.

Risk to market conditions.

Property markets can fall as well as rise. British Pearl endeavors to lock in value immediately for our investors by buying below market value or adding value to the property, possibly through refurbishment. Our investments are for 5 years but we can extend or sell earlier if it makes sense to do so. This creates adaptability to outlast a difficult market or sell and crystalise any profit early. Customers wishing to exit early have an opportunity to do so in our Resale Market. Our Loan To Value range is from 50% – 70%, with a first charge. This is very secure compared to what other platforms offer and means that we are confident of avoiding any defaults on our platform.

Risk of void periods.

Void periods are obviously not good for a property investment. Our Property Team selects properties in areas of high rental demand to protect against this risk and our Property Management Team is responsible for ensuring properties are tenanted with minimal void periods. We also have a sinking fund for each investment (SPV Reserve) that can cover a 3 month void period so that all liabilities are met (such as any service charge, ground rent or interest payments). Despite this approach, there remains a risk of a property being vacant for a time. That may affect both Share Investors and Loan Investors. Share Investors may not receive dividends and Loan Investors may not receive interest payments (thought these still accrue), and such a situation will only be sustainable for a limited period before we would have to sell the property.

What are the company plans in the near future in terms of platform expansion and functionalities?

Our aim is to become the most diverse property investment platform on the market. We want to offer our customers equity and debt products across a wide variety of nationwide properties so that our customers can build the a diversified property portfolio. Our investment categories are Tenant Ready, Refurbishment and High Yield (e.g. HMO). Our aim by the end of the year is to also offer development opportunities as well as commercial deals. In the pipeline is an auto invest function and a REIT product.

How do you see the real estate crowdfunding market in the following years?

British Pearl sees this as a very young and rapidly growing market. We see this trend continuing and that it will come to be seen as an increasingly trusted method of investing in property, with a few better known reputable operators, including British Pearl of course!

British Pearl Verdict

British Pearl is a new player in the real estate investing platform market, and it is great to see how the market is growing. It can be a great option for those looking to invest in the UK real estate market without huge sums or complicated bureaucracy.

If you are interested in real estate and peer 2 peer investing platforms, you will surely enjoy some of our other guides on this topic. Check our Mintos review, and our list of the best peer to peer lending platforms in Europe. You may also want to check our list of real estate crowdfunding platforms.

Are you considering invest in British Pearl or are you already an investor? Leave your thoughts and questions in the comment box below.

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