A new and innovative way for people to invest in the UK residential property market has emerged, with the launch of crowdfunding platform, Property Partner.
Property Partner enables people to invest in individual residential properties, just as they can in company stocks. They then receive a monthly rental income — and benefit from any capital growth — in direct proportion to their ownership. The platform also enables investors to offer their property holdings for sale via a designated secondary market.Investors can choose to invest in a property with as much or as little as they like. When the transaction closes, they jointly own the property with any other investors in the same property and receive their share of rental income each month.
Property Partner operates a transparent and simple fee structure:
- A one-off transaction fee of 2% charged on purchase of your investment (not annually recurring and no charge on disposal)
- An industry standard rate of 12.5% (+VAT) of rental income for the three services of advertising, letting and managing the property
The new platform has brought simplicity and transparency to a residential property market that has traditionally had high barriers to entry. Its launch follows a £1.25m seed funding round involving Octopus Investments (backers of Zoopla), Jon Moulton (founder of Alchemy Partners and Better Capital) and Ed Wray (co-founder of Betfair and Director of Funding Circle).
Crucially, Property Partner investors can realized any capital gains by offering their investment for sale to others on the platform at any time. After five years, the platform also gives everyone the option to exit at market value, even the investor who put the least amount of money into the property.
CEO of Property Partner, Daniel Gandesha stated, “Time and time again I wanted to invest in residential property in a particular area. I would see nice coffee shops starting to pop up, steady increases in the number of estate agents setting up shop, regeneration plans being approved – but still didn’t make the step. The reality is that buying a residential investment property is more like starting a business than making a simple investment.
“We set out to make investing in residential property as easy as buying shares. We’ve overcome significant financial, regulatory and technical challenges to make this a reality and the strong demand for our first property reinforces my belief that we have built something investors really want.
“We have the backing of heavyweight angel investors and the VC firm that backed Zoopla. We’ve just recruited Jalin Somaiya from Google, as our COO, and Robert Weaver from RBS. Rob is one of the UK’s leading residential property professionals. He’s managed a fund that held half a billion pounds of residential property and gave the keynote at the RICS conference last year. This is a great team and we believe we’re offering something truly unique to investors.”
Property Partner has already successfully funded one property, a three-bed Victorian house in Croydon, South London, as part of its ‘beta’ launch to a closed group. The funds to purchase the property were raised in 21 days from 148 investors. ‘Resale’ shares in the Croydon property are now available on Property Partner’s site.
The other properties currently available to investors on Property Partner are a two-bed house in Hounslow, West London, and a two-bed flat within a warehouse conversion in Whitechapel, walking distance from the City of London. Additional properties will be added to the platform in the very near future. In the longer term, Property Partner intends to offer properties not just in the UK but internationally.