Real Estate Investments with p2p part deux (UK)

This post is also available in: Deutsch (German)

Some time ago I gave you an overview of Baltic and European real estate p2p marketplaces. Today I will continue with an overview of the British p2p platforms from the real estate sector. There are so many that I won’t be able to cover all of them.

Different funtionalities

Firstly I would like to make a distinction: Mainly there are two different types of marketplaces. You are either lender and invest in loans and get interest for that, or you become equity owner and participate from the objects earnings and value growth. What all marketplaces have in common is that you better have a UK GBP account in place (for most it is mandatory). If your are no UK resident, the Transferwise Borderless Account (review only in German to date) provides a free UK GBP account for you. Many platforms offer a cashback or sign up bonus to new investors. Check my overview to see which platform offers what kind of bonus.

Loan-Marketplaces

Lendy (aka Saving Stream, interest up to 12%)

Lendy is one of the older p2p marketplaces and has successfully funded loans for a multiple hundreds of millions. With this marketplace you invest in loans and get your interest added monthly (if your loan is current) to your account. This works still fine. There are many loans in default at the moment. This doesn’t necessarely mean that there will be losses to investors. To date all loans in default were handled and investors did not loose a penny. Given the increase in defaults declared I am not sure if this situation will remain. I guess investors need to prepare to some losses, as the provision fund in its current state is not able to cover all losses. Customer support has never been their strength, and it has never been quick or friendly. But they managed to get worse during the last months. More on Lendy’s functionality here… and nearly I forgot, there is a secondary market in place.

Collateral (Interest up to 15%)

Actually Collateral has started as an online pawn shop and took watches and jewellery as security. Over time they moved towards property lending. According to the platform they are still interested to have watches etc as loan collateral, but the supply is not there at the moment. If this is true or it is just that property deals are more lucrative because of the deal sizes… I don’t know. I would understand the platforms move into property but would really appreciate some pawn loans for diversification. It remains to be seen how good the property deals are as they just started some months ago. There is a secondary market.

Landlordinvest (Interest up to 20%)

Landlordinvest offers the highest max returns. The CEO stated in an interview that they would like to create a balanced risk return portfolio as a strategy, so not all loans will be really risky. I have already noticed a loan with single digit return, but also others in the range of 17 to 20 percent. As the platform began its operations only beginning this year there is not much of a track record available. What I can say is that some loans were redeemed (early) and no default occured so far. The deal flow is limited but gets better month by month. The funding period takes time due to few investors on the platform, but the bids get a cashback of 3 to 4 percent (annualised rate) for compensation of the waiting period. A secondary market is live since the beginning.

Funding Secure (Interest up to 13%)

Funding Secure as well started as a pawn broker like Collateral, but already in 2013. After some loans the property part took over and there are few other loans now. There is a huge loan supply, raingeing from several thousands to several 100k. The loans are announced by email some hours or a day prior launch date on the platform. The platform has to deal with lots of defaults which comes not as a surprise to me, as they are in business for more then 4 years now. Secondary Market is available.

Moneything (Interest of up to 14 percent)

The Things, how the employees refer to them selfs are very involved and do a lot of things the correct way for Moneythig. The founder Ed (thing ;)) and his familiy handle the communications very well. They recently had to deal with three defaults, but informed transparently. One of the defaults was handled in the meantime with no loss to investors. The other two are followed closely. For me this marketplace behaves exemplary towars its investors and communicates really well. It seems they know to handle their business. Of course there is a secondary market available.

Subscribe to the p2phero Newsletter

Equity-Marketplaces

Property Moose

Property Moose came to my attention nearly a year ago. The platform offers fixed rate loans rarely. Mostly they offer buy to let (BTL) or buy to sell (BTS) projects. Investors participate from the rental earnings and the value increase at the point of sale. There are yield projections which in my opinion mostly do not match what really will be earned, the value growth depends on the market development. At the end of a project period there will be a poll if the property should be rented again or be sold. Each investor has a vote for every pound invested, so the bigger investors have more influence. A secondary market is available.

Property Partner

Property Partner is somewhat comparable to Property Moose, but mostly does BTL projects. The properties are in a higher segment and the projections about the yields is more realistic. Secondary Market is available.

Uown

Uown is also in the business of buy to let properties with a sale when the projects predefined term ended. It is a really new platform which has only completely funded one project and two are still in the funding phase. There is not much to tell about, besides that there is no secondary market at the moment. I will invest GBP 20 in both open projects to gain some insights. 20 GBP is the minimal investment amount.

Brickowner

current Brickowner project

And there is Brickowner which cannot be placed in any of the above categories. Retail investors can invest in projects which normally would only be open for big hitters or institutionals. Now we can invest alongside the pro’s, and this with as little as GBP 100. The projects vary, there are BTL, BTS and sone sort of loans. Currently there is one project open for funding, where we can invest in a portfolio of loans issued to developers. The duration is set at 2 years with a 7.5% annual yield. The advantage of the project is that the Lead Manager (Nash Asset Lending) participates with 10 percent of its own money. In case of losses, these 10 percent will firstly cover any occuring losses, so they build a buffer. Further Nash Asset Lending will cover any losses above these 10 percent, should it be necessary. They are convinced that their projects are of great value, so they offer this additional security. We could say that there is some sort of buyback in place. I cannot tell how financial stable Nash Asset Lending is, but I trust Brickowner’s due dilligence in this case, as any loss for Brickowner Investors would be fatal to the platform. If you are interested in Brickowner, use this link for registration and get GBP 50 as soon as you have invested GBP 1k in total. This offer is not timely limited.

2 Replies to “Real Estate Investments with p2p part deux (UK)”

  1. Thanks for this excellent overview ! I’m curious about one obvious thing, though : what about the exchange rate fluctuations for people outside UK ?

    My only experience of investing in a currency other than Euro was GEL loans in Mintos. The interest rate was great, but unfortunately the wild change of exchange rate didn’t play in my favor. I ended up being nearly flat on that portfolio 🙁

    1. Sure exchange rate is an important question with regard to investing. I see the high interest rates as a kind of buffer. GEL/EUR may not be comparable to EUR/GBP given the importance and exchange fees of the GEL. The EUR was really strong during the last weeks and crushed the GEL. So I would not look at it short term.

      I am conducting an analysis of exchange rate impact at the moment and will share my findings in the next days or weeks.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.