Crowdfunding Hits the UK Buy-to-let Market

British investors have a centuries-old affection for property. Bricks and mortar are arguably the most tangible, and best understood, asset class of all. But while many of us might aspire to become buy-to-let landlords, the costs, hard work and red tape involved have, until now, put off all but the truly committed and relatively wealthy. These days, the challenges and complexity of the process make it much like starting a business. Managing tenants and maintaining properties is time-consuming and stressful. But all this is changing fast as the crowdfunding revolution comes to the property sector.

Property Partner is a platform that enables anyone to buy shares in residential property at the click of a button, without the hassle of mortgages, solicitors or maintenance.

Shareholders receive rental income each month in the form of dividends, and can realise capital gains if the property rises in value. The letting and management is carried out by professional agents on behalf of investors – so there are no late night calls about dripping taps to deal with.

To date, Property Partner has funded over 300 UK properties, making it easy for investors to spread their risk by diversifying their portfolio. Founded in 2014, the FCA-regulated platform is producing a current estimated return of 8 per cent per year, after fees.

This performance has attracted over 9,100 individual investors, 73% of whom have bought shares in multiple properties. There’s also reassurance in the way the assets are owned.
Each property investment is held in a limited company called a Special Purpose Vehicle (SPV). This means it is totally ring-fenced from the assets and liabilities of Property Partner, and the other investments on the platform.

Property Partner’s Resale market gives investors the opportunity to exit the market at a time and price of their choosing. Investors can realise capital returns by selling their shares on platform, and pocket 100 per cent of the proceeds, as there are no exit fees to pay. Over £10.5m in shares have already been traded on this rapidly growing secondary market.

Investors aren’t the only ones to benefit from the Property Partner model. By providing much-needed cash-flow to small developers, the company is also doing its bit to boost housing supply. In one example, Property Partner bought four newbuild homes from a local developer in East Sussex, freeing him up to move onto his next project – and providing an investment opportunity that was crowdfunded in just 28 minutes.

But these properties aren’t just investments, they’re also people’s homes. For Property Partner, tenants are just as important as investors. That’s why it sets fair rents, fixes problems quickly and invests in upgrading its estate – because good landlords make good returns.

Property Partner might offer a new way to invest in property, but as well as being regulated by the FCA and audited by KPMG, it has some of the best-known and most established names in property, technology and finance standing behind it.

Their Director of Property Robert Weaver is one of the most accomplished and respected residential property professionals in the UK. As former Global Director of Residential Property at RBS, he’s an expert at handpicking properties that outperform for investors.

It’s board of directors includes Ed Wray, co-founder of Betfair, and Neil Rimer, co-founder of the global venture capital firm Index Ventures, who has invested in market-defining companies across the technology and finance sector, including Funding Circle and TransferWise. Property Partner’s own aspirations are no less ambitious. Soon its investors will be able to choose from properties all over the UK, Europe and beyond – and the ultimate aim is to create a global stock exchange for residential property.