- Invest from just £500 (which can be spread across up to 10 loans for easy diversification when using the AutoInvest feature, so £50 per loan)
- FCA regulated – directly authorised
- No hidden fees or extra charges
- As with all P2P lending, not covered by the FSCS (financial services compensation scheme)
- You don't get to physically assess the properties you invest in
- Funds are tied in with an average loan length of 14 months
CrowdProperty review – the founders of CrowdProperty established the business in recognition of the crisis in traditional lending.
CrowdProperty provides easy, quick finance for property professionals while offering investors attractive inflation-beating interest – typically offering investor returns of 7.0-8.0% per annum.
The CrowdProperty team uses its experience to choose and oversee the best projects for investment. The company uses advanced technology to pair each investor with borrowers directly, to create property success. To date, the platform has funded over 150 property project loans with a 100% capital and interest payback record to investors.
Would you like to know more? Check out our CrowdProperty review.
At A Glance
CrowdProperty is a UK-based company and a peer-to-peer lender that specializes in property secured development and bridging loans with a low LTV.
The business is the only property project platform member of the Peer-to-Peer Finance Association (P2PFA), a self-regulatory body for peer-to-peer lending. It’s main aim is to provide increased transparency around loan book performance and the ‘top table’ of UK peer-to-peer lending, alongside other sector leaders.
All property loans have first legal charge on the assets used as security. A ‘first legal charge’ gives CrowdProperty the legal right to take ownership of a property in the unlikely event that a property professional defaults on their loan repayments.
First legal charge is the highest level of security and gives CrowdProperty all the rights that a mortgage company holds. This means that should there be a default on the loan, the CrowdProperty investors will be the first to have capital and interest repaid when the asset is sold, before any other lenders who may have a lower legal charge credit extended on the asset.
Importantly, the first charge holder has total control over any required recoveries processes, should the unlikely happen.
All CrowdProperty loans have an LTV of less than 70 per cent of the starting development site value, with an average of 61.3%. This provides additional investment confidence, as should there be a default, the site will only need to sell at 70 per cent of the original valuation to pay back the investor funds of the loan.
With this focus on low risk loans and a lending team that has well over 100 years of experience in the property industry (75 years amongst the 3 founders alone), CrowdProperty is a sound investment.
What Fees Do CrowdProperty Charge?
For borrowers, CrowdProperty has competitive fees and rates. Typically, these range from 0.62 to 0.88 per cent per month, depending on the project economics, developer experience, and level of debt.
Since CrowdProperty works with property professionals directly, there are no intermediary fees.
For investors, there are no fees – making it an attractive option with just a minimum investment of £500. The minimum of £500 is the minimum SelfSelect investment in one loan but with AutoInvest, the minimum £500 could be spread across up to 10 loans.
How Safe Are CrowdProperty Investments?
Any investment carries a degree of risk, but our CrowdProperty review has found the company has measures in place to negate much of the risk to provide a safe investment.
There are a number of measures to offer peace of mind, including:
- First Charge Security
- CrowdProperty perform rigorous, strict checks on all proposed projects
- CrowdProperty works in partnership with borrowers through to project completion
- Deep expertise in exactly the asset class being lent against
- Loans are secured on the property, which can be sold to compensate investors in the unlikely event of problems
- In the event of a default, CrowdProperty takes ownership of the project
- If appropriate, CrowdProperty will complete the project to return capital and interest
- Investments are based on 70 per cent of the starting property value
- CrowdProperty has a team of surveyors, solicitors, and industry experts to check investments are sound
- You remain in control of how much and when you invest. You can invest from just £500
Essentially, CrowdProperty provides the opportunity to invest in property projects and offers protection from the risks involved typically associated with this type of investment.
All the investment opportunities are analysed, with the CrowdProperty team checking borrower history, development history, and project economics carefully before providing approval for the investment.
Over £2bn-worth of projects have been assessed to date, with around 3% of those applications funded.
How Investing With CrowdProperty Works
There are three stages of how investing with CrowdProperty works.
The project review stage: This involves the property professional submitting a loan application and providing the details of the project and background information.
This application and project are then subject to appraisal. Every loan is subject to a complete appraisal by a member of the borrower team. A RICS valuation is then conducted to confirm the projected values and profits.
The launch process: Once the project has been confirmed to meet the strict CrowdProperty requirements, the company will issue a formal offer. Lenders will then receive updates about webinars and launch details.
A live webinar is run by the CrowdProperty team with the borrower prior to the project launch. This provides an opportunity for potential lenders to ask questions. Once the project goes live on the CrowdProperty platform, members can pledge funds until the loan amount is completely raised.
The project progress: One week to eight weeks after the launch, lenders are required to transfer the funds and fulfil their pledge. Lenders are updated throughout the project, with the CrowdProperty team providing regular reports conducted by an independent monitoring surveyor.
Once the project completes, capital plus interest is returned to the lenders.
There is also an AutoInvest feature, so you don’t need to sit at your computer. You can invest using AutoInvest to gain access to great investment possibilities.
CrowdProperty still guarantees AutoInvest accounts to get some of the loans; it depends on the number of investors who want to put money in at the same time.
CrowdProperty Reviews From Customers
The auto-invest feature is a huge bonus for ensuring you remain invested and don’t miss out when you are time poor.
I’m thoroughly impressed with the returns and professionalism of the team and more recently have found the articles and information on the blog very useful for enhancing my knowledge and gaining a better insight into how CrowdProperty operate!
So, is CrowdProperty Any Good?
Our CrowdProperty review has found this platform appears to provide a comprehensive service, looking after investors. The company appears to have covered all the bases, sourcing viable loans, tracking progress, and ensuring investors get a good return.
Let’s explore the positives and negatives to discover if CrowdProperty could be a good option for you.
Positives Of CrowdProperty
- Comprehensive service with CrowdProperty looking after your investment on your behalf to minimise your risk
- CrowdProperty offers a user friendly platform that is transparent and easy to use
- Access to solid investment opportunities, partnering with professional property developers
- CrowdProperty evaluates each project to reduce your investment risk
- No hidden fees or charges
- Minimum investment of just £500
- CrowdProperty is also authorised and regulated by the FCA, but this is different from the FSCS, so your capital is not protected like it would be in a bank
Negatives Of CrowdProperty
As with any investment, there are also disadvantages that you should be aware of before you consider risking your funds.
- Your Capital is at Risk: While CrowdProperty mitigates the risk, all investments can go down, so as with all peer-to-peer lending, you could lose some or all of your investment
- Tie In: Once you have pledged and funded an investment, your funds are tied in until project completion
- No Access: You can’t physically check the condition of the property yourself (although you can of course go to take a look)
A Short History Of CrowdProperty
The CrowdProperty Peer to Peer platform launched in 2014, and to date, the company has lent over £55 million on projects with overall values of an impressive £130 million.
Currently, there are 9,000 investors on the platform. The business has paid back over £20m to investors over 5 years, maintaining a 100% capital and interest payback track record.
Our CrowdProperty review has found the company has a history of developing relationships with a large range of property developers, providing direct and exclusive access. This means that borrowers don’t need to pay costly brokerage fees while offering the potential for impressive yield returns for investors.
Unlike most Peer to Peer lenders, as of 2018, CrowdProperty is breaking even, adding to the stability of the company reputation.
CrowdProperty Review – Summary
Overall, CrowdProperty offers a good option to diversify your investments with decent returns with first legal charge. The company thoroughly vets every project, but in the event that a loan does default, it is still likely that you will have your capital returned.
Typically, CrowdProperty can offer between seven and eight per cent returns on secured assets, due to its impressive borrower screening. To date, all loans have been repaid with no investor losses across 150 projects and more than five years of operating.
The company is considered to be stable with good loan flow, so you can quite quickly have your capital lent out to secure an investment.
CrowdProperty offers the option to invest via IFISA as well as SSAS and SIPP pensions through the platform, to allow tax free investing – all with FCA regulation.
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