Value Nomad

June 2, 2020

CrowdProperty Review

CrowdProperty Review: A trusted platform driving the real estate investment market in the UK. Let’s analyze the platform and why it might be a great investment avenue.

Are you looking for an alternative real estate investment platform? Can’t afford to buy an investment property on your own? In this CrowdProperty Review, we delve into why CrowdProperty is a standout in the real estate market.

CrowdProperty Overview: What is CrowdProperty?

CrowdProperty is a UK-based real estate peer-to-peer lender that specializes in property bridging and development loans with low loan-to-value ratios. It’s based in Birmingham, UK.

The company was founded in Nov 2014. Its three co-founders: Mike Bristow, Andrew Hall, and Simon Zutshi, and the team, have over 100+ years of combined experience in real estate and finance.

Unlike other P2P lending companies, CrowdProperty issues asset-backed loans. All loans have 1st legal charge on assets that act as collateral. Should the loan default, investors are first to get capital once the underlying asset is sold.

Historic Performance

Luckily, the CrowdProperty team is thorough in vetting projects. To date, 100% of capital and interest has been paid back on loans that have ended through over 5 years of lending.

Additionally, all loans have an LTV of less than 70% (average of 61%) of the starting value of the development. In case of default, the project would only need to sell 70% of its valuation to repay investors.

To date, over 55M Pounds of loans have been funded on the platform, spread across over 150 loans and going to over 100 different borrowers. Interestingly, the 55M Pounds is filtered down from over 2BN Pounds of applications for finance to date, which is very reassuring. The company is also authorized and regulated by the FCA (Financial Conduct Authority) since November 2017. Furthermore, CrowdProperty is the only property development / bridging platform member of the Peer-to-Peer Finance Association (P2PFA), the ‘top table’ of UK peer-to-peer lending, alongside other sector leaders and is the only property development / bridging platform to be Brismo Verified, underlining their commitment to disclosure best-practice and independent accountability for the performance of every loan that they originate both historically and going forward. 

CrowdProperty also has an authoritative view on the sector including a series of 40 articles about alternative finance, crowdfunding, peer-to-peer lending, property and CrowdProperty on their blog (https://blog.crowdproperty.com/) and interesting video case studies of projects they’ve funded here

Key Stats at a Glance:

  • Founded: Nov 2014
  • Founders: Mike Bristow, Andrew Hall, and Simon Zutshi
  • Headquarters Location: Birmingham, UK
  • Registered Investors: 9000+ as of Oct 2019
  • Minimum investment: 500 Pounds in an individual project. 500 Pounds through Autoinvest which could be divided into 10 projects, each getting 50 Pounds minimum
  • Estimated Return: 6% – 8%
  • AutoInvest: Available
  • Buyback guarantees: No
  • Regulation: FCA regulated; FCA number 723959
  • Accepted currencies: Pound sterling

How to Open an Account on CrowdProperty

Opening an account on CrowdProperty is easy and straightforward. It takes no more than a few minutes.

To register:

  • Fill out your details on their website. These include name, address, valid email, etc.
  • Upload a valid ID or passport, and a utility bill or bank statement that’s less than three months old.
  • Wait for confirmation. It takes at least 1-3 working days to get verified and start investing on the platform.

Click HERE to open an account on CrowdProperty

Investors must also have a UK bank account to register. Fortunately, you don’t have to physically live in the UK to open a bank account there. Several banks, especially online banks, don’t require proof of address to open an account.

How to Invest in CrowdProperty

You can invest in CrowdProperty in two ways: manually or automatically.

To invest manually, head over to the “View Projects” tab on the site. It lists all ongoing projects, including any relevant details to help you make a decision.

Once you find a project that fits your criteria, click on the “pledge to this project” button to specify your pledge/investment amount. You must also specify the account to be debited.

Of special note here: You can pledge to a project without capital in your account. Before the loan goes live, CrowdProperty will contact you and request that you deposit the pledged funds.

To invest automatically, use the AutoInvest tool on the website. An intuitive algorithm helps you build a diversified portfolio over time.

You can specify the maximum amount you’re willing to pledge towards any project, and the AutoInvest tool will never exceed that.

Using the AutoInvest option comes with the added benefit of allowing you to automatically reinvest profits and compound returns.

You’ll receive regular updates on projects in your portfolio, and receive returns when the project is complete.

Types of Investments Available at CrowdProperty

CrowdProperty supports and invests in small and medium-sized property businesses. It funds Property Bridging & Development Loans, supporting all types of residential property projects – whatever the structure or nature. The UK government estimates the housing under-supply requires building at 300,000 new homes every year.

It aims to alleviate this problem. The platform focuses on low-risk loans. These loans have a loan-to-value (LTV) ratio of less than 70% of the starting value of the development site.

What does this mean? It implies that in the event of a default, the project would only need to sell at just 70% valuation to pay back investors.

All loans also have 1st legal charge on the underlying assets. Should the loan default, CrowdProperty investors get their capital first when the underlying asset is sold.

CrowdProperty Auto-Invest Tool

The platform boasts of a robust AutoInvest feature that cuts down investment hassle. To use it, set your investment parameters and let the tool allocate capital while you sit back and watch.

How much gets invested depends on the number of investors trying to get a piece of the action at the same time.

However, CrowdProperty limits auto-investment capital to just 20% of your overall portfolio value. The upper limit adjusts as you invest in more loans and expand your portfolio.

Furthermore, you can “skip next project” while using the AutoInvest tool. This gives you time to perform due diligence before you auto-invest.

How Much Can You Earn with CrowdProperty?

Average returns range from 8% p.a and above. The yields are at par with other P2P lending platforms. CrowdProperty’s returns, however, come with lower risk profile given the 1st legal charge for security on funded projects.

Individual investor results may vary depending on strategy, project picks, time horizon, etc.

Who Can Invest In CrowdProperty?

CrowdProperty is open to residents of the UK and EU who are 18 years and above. You’ll need to pass the ID and anti-money laundering checks by submitting a government-issued ID, or passport, and proof of address document.

Investors must also have a UK bank account to register.

CrowdProperty Pros

  • FCA authorized and regulated since Nov 2017
  • Long operating track record and proven experience with over 5 years in the market
  • Good yields of about 8% p.a. on secured assets with excellent LTV’s.
  • 1st legal charge security on all projects
  • The simple registration process and an intuitive easy-to-use website
  • Availability of an AutoInvest option
  • Availability of an ISA and pension lending for tax-free investing
  • A high volume of loans on the platform
  • Thorough due diligence ensuring 100% repayment and minimal defaults of capital and interest and zero defaults to date
  • Market leading transparency on their statistics page
  • Independent verification of lending performance by Brismo

CrowdProperty Cons

  • No repurchase guarantee
  • Lack of a secondary market
  • Minimum investment requirement of 500 GBP on each loan (unless using AutoInvest to divide capital across up to 10 projects, investing 50 GBP minimum in each)
  • AutoInvest only allows a maximum of 20% of the portfolio for lending

CrowdProperty Verdict

Bottomline: In this CrowdProperty review we uncovered an established platform that allows investors to diversify into the real estate industry. It’s authorized and regulated by the FCA, further cementing its reputation.

It has an easy-to-use platform and a great deal flow that ensures constant availability of investment opportunities. On the downside, there is no secondary market. Investors, therefore, have to wait until project completion to get returns.

Given its long, profitable operating history, and the experienced team at the helm, CrowdProperty is a great choice for investors looking to diversify into the property sector.

Other Crowd Investing Resources

Looking for more options? You might want to read some of our other crowd investing and peer to peer lending reviews. There are many peer to peer lending and investing platforms currently available, and you can diversify your interest income by using several of them simultaneously.

You can consider some other peer to peer companies by checking out our Estate Guru review or our PropertyPartner review. Also check our posts on the best peer 2 peer lending platforms in Europe, and the best real estate crowdfunding platforms in Europe.

Are you already investing in CrowdProperty or in any other peer to peer lending platform? Leave your thoughts and questions about this Crowdproperty review below.

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