Crowdahouse relaunches as peer-to-peer

August 19th, 2015
Crowdahouse

Crowdahouse was founded by financial services and property professionals in 2012, creating the world’s first equity crowdfunded real estate investment fund.  Crowdahouse pioneered a method to navigate a complex financial regulatory framework unsuited to fintech purposes like crowdfunding.

The site has now relaunched as a peer-to-peer platform for secured lending to real estate professionals.

Here is the full press release:

Crowdahouse (http://www.crowdahouse.com), the global pioneer of equity based real estate crowdfunding in 2012, has relaunched as an asset backed peer to peer lending platform.  “We’ve been following the market closely since our original launch and have now created a far simpler model for our members,” said co-founder and CEO Gary Corben.

"The new Crowdahouse model is incredibly simple. Members lend money via a limited company and get security with a first charge over the property, just like a bank.

"We’ve found that most people want to profit from property without the headaches of ownership and our secured lending model clearly fulfils that need.  Apart from earning interest on their money, secured by a first charge, our members can also feel good about helping to provide more homes for families."

Crowdahouse co-founder Peter Lane added, “With equity-funded property transactions, the issues surrounding joint ownership, management and exit are highly complex.  We fear there will be severe investor disappointment in the future from equity based models."

“Our hands on experience in both residential property and financial services has enabled us to remove the key problem areas of crowdfunding, making the investment decision much more straightforward,” stated Corben.

“Unfortunately, there are a number of ventures that see entry to the business of property crowdfunding as easy, perhaps as simple as building an online platform. But understanding the complex legal issues, meeting regulatory compliance and the reality of actually managing the crowd in a property fund, is truly challenging."

Crowdahouse also has plans to expand its peer to peer lending base into retail customers.

The Crowdahouse Story

In 2012 Crowdahouse created the world’s first equity crowdfunded real estate investment fund - the Crowdahouse Pioneer Fund.  This was a truly innovative product allowing anyone to join a crowd and own investment property together.

However, in 2012 the Financial Services Authority were not ready for such emerging fintech models, and there existed regulatory risk in proceeding without clear FSA sign-off.  Crowdahouse co-founder Lane, who also ran an FSA-authorised firm, decided the risk to members was unacceptable.

“We wanted to protect our Members' interests as investors, which would have been impossible,” says Lane.  “We’ve witnessed the explosive growth of property crowdfunding in particular and with most of the founders of today's platforms having been original Crowdahouse Members and inspired by our innovation, we feel the time is right to re-enter the market, but with a revised model.”

Crowdahouse has now relaunched with a loan project to raise £500,000 (USD$790,000) to refinance an apartment block called Pullman House.  Lenders will get a 10% p.a. return for a 9 month term secured with a first charge over the property.

Crowdahouse borrower and professional property investor Lindsay Naylor says, “Being able to raise loans via Crowdahouse is going to help revolutionise my business and move it up a gear entirely.  The speed and flexibility of terms made it an easy decision.”

As well as relaunching with a revised peer to peer lending model, Crowdahouse is in talks with partners to expand its footprint to other territories as a matter of priority.

FundingKnight wins Best Online Peer to Peer Provider

July 17th, 2015
FundingKnight

Hampshire-based alternative finance platform FundingKnight has been named the Best Online Peer to Peer Provider at the Your Money Direct Awards.

Your Money is a website which helps people get the most from their money with features, news and tips on investments, savings, retirement and financial planning.  The Your Money Direct Awards, now in their 18th year, are held each year to recognise the best direct providers of financial services in the UK.  The awards cover categories such as current accounts, ISAs, personal loans and insurance.  This is the second year that the Online Peer to Peer Provider category has been running.

The awards judging process evaluates the products of qualifying organisations based on the competitiveness of their price and structure.  A final shortlist is compiled which is then judged by a panel of mystery shoppers on criteria including user-friendliness, application process, clarity of information and overall price satisfaction.

FundingKnight’s CEO, Graeme Marshall, commented: “Quality and integrity have always been at the heart of FundingKnight and we have always strived to achieve the best results for both borrowers and lenders. This ethos has resulted in products that offer demonstrable customer value, and we are delighted that Your Money has recognised this achievement.”

RateSetter cashback offer

June 28th, 2015
RateSetter

One of the leading peer-to-peer companies in the UK, RateSetter, have announced a new cashback offer from 1st July for new and existing lenders.  New lenders are able to earn an additional £25 for signing up through the P2P money cashback site.

This has generated some discussions on the P2P Independent Forum which are an interesting read.

Here is the email send to existing lenders:

Unprecedented demand for borrowing has driven lending rates to very high levels, providing you an excellent return on your investment.

If that wasn't enough reason to invest more we are giving all our lenders the added incentive of cashback.

We've also listened to your feedback following our last cashback offer. To help you organise your additional investment, we're giving you plenty of time. The offer starts on 1st July.

Cashback offer:

  • Invest an additional £2,500 and earn £25 cashback
  • Invest an additional £5,000 and earn £50 cashback
  • Invest an additional £10,000 and earn £100 cashback

What you need to know

  • This offer is limited to a two week period, so don't miss out
  • You need to commit the additional deposited funds for at least 1 year to benefit from this offer
  • Please remember that your returns are before tax, assumes you reinvest throughout the term and assumes coverage from the RateSetter Provision Fund now standing at over £14m
  • Capital is at risk and your money is not covered by the Financial Services Compensation scheme

Here are the full terms and conditions:

  1. Offer valid from 00:01 on 1st July 2015 and ends 18:00 on Tuesday 14th July 2015.
  2. Lending orders not completed before the deadline will not be eligible for the offer.
  3. In order to be eligible for cashback, the additional funds must be committed to a lending term of 1 year or longer.
  4. Maximum cumulative cashback per customer is £100.
  5. We will credit your account with the cashback bonus within 28 days from the end of the promotion.
  6. Cashback can be used for lending or can be withdrawn.
  7. Sell-out requests made during the promotional period cannot be reinvested in order to receive the promotional bonus.
  8. Contracts repaid during the promotional period will still be valid for the promotion.
  9. The member-get-member promotion can be used in conjunction with this cashback offer so feel free to introduce a friend to RateSetter and you can both benefit.
  10. RateSetter reserve the right to retain the cashback earned in connection to a Sell-out request during this promotion.

What are mini-bonds?

June 28th, 2015

There are several peer-to-peer and crowdfunding companies, including Wellesley & Co and CrowdCube offering "mini bonds".  But what are mini bonds?  Choice Loans have put together an informative infographic on the subject.

View Interactive Version (via Choice Loans)

CrowdProperty lend £1million

June 28th, 2015
CrowdProperty

CrowdProperty has today joined the select number of peer-to-peer companies that have lent £1million.  According to CrowdProperty just under 2000 lenders have registered on the platform since launch last year.

Here is the full press release:

CrowdProperty (www.crowdproperty.com) today announced it has passed the £1m lending threshold, with a total of £1.43m now raised across four residential property development projects in the UK. Almost 2,000 people have become registered lenders on the platform since its launch on August 31st last year, with 160 of these having lent money to current projects and who are now earning 10% per annum gross interest on their money.

The first property development to go live on the CrowdProperty platform was a pub conversion, creating four residential flats and two commercial units, which took 14 weeks to fund. Since this, the time to complete funding has been reducing as lender liquidity increases, with the fastest fully-funded development to date having taken just six weeks. The company is confident that a one-week timescale will become possible within the next few months as lending appetite continues to grow.

Simon Zutshi, founder director of CrowdProperty, explains:

“Passing the £1m target for lending is a key milestone in our growth strategy but we expect growth to accelerate significantly now that we have so many new, active lenders joining our crowd. With any new P2P proposition it is vital to ensure that early lenders build their confidence with real returns from solid projects delivering great value. Our lenders receive 10% per annum returns on the money they lend. This is higher than many other peer-to-peer lending platforms, which often do not secure the lending and one of the reasons why we always commit to take the 1st charge of the property asset lent against.

Zutshi continues:

“Another exciting development which has recently become available via our platform is the added potential now for anyone with a SIPP or SASS pension to lend to our development projects, providing another angle for many people wanting greater diversity and a solid return on their capital.”

The revenue model for CrowdProperty is straight-forward: borrowers pay a one off 3-5% arrangement fee and pass the full amount of the gross interest (9-11%p.a.) payable on the loan to the crowd of private individuals (lenders). Borrowers can apply for up to 100% finance on new developments at 9-11% p.a., depending on a set of proprietary due diligence criteria. Unlike most P2P lenders, CrowdProperty secures all loans with a first legal charge against the property asset lent against – in much the same way as a bank or building society would.

Since launch 2,000 prospective lenders have registered on the CrowdProperty website and more than 650 potential borrowers have also registered - with almost 100 property projects having already been submitted by potential borrowers for consideration. More than 2,500 people now follow CrowdProperty on social media and anyone with £500 or more can pledge towards the projects and receive potential 9-11% gross returns. Capital is at risk, see website for details.