As the crowdfunding sector continues to grow, as does its inevitable expansion into property. With house prices rising year on year, especially in prime spots such as the City of London, property investment can be difficult to get into for the ordinary investor. However, property crowdfunding offers an opportunity to pool resources with others to buy into the market; a concept that is growing increasingly popular.
A Piece of London is one such property crowdfunding platform. They have just launched their first two projects, allowing investors to invest as little as £1000 in property in prime locations.
The process is simple. Using the online platform, investors choose a property, set up an account and invest the sum of their choice. Operating under FCA guidelines, A Piece of London will then do the hard work, putting the money together with that of other investors and creating a UK limited company that will then buy the property. A Piece of London then manages the property and divides the rent between the investors; in short, the model has the potential to make ‘buy to let’ a whole lot easier.
Unusually, A Piece of London operate a profit share model, meaning that they only make money from an investment if their investors do. According to them, this “completely aligns their interests with their investors”.
The company’s founder is Fintech entrepreneur Shailash Sanghrajka, who has spent the last 18 years atinvestment banks and hedge funds. He says:
“We want to open up the London property market and make it accessible to ordinary investors wanting to make smaller investments.
“Investors should have control over their investment choice, confidence of exactly what they are buying into and have their own sense of property ownership without the need for huge deposits, mortgages or the hassle of investing on their own.”
Projects include the famous development of Battersea Power Station and new property in Tooting Broadway, which is already nearly 50 percent funding. With estate agent Savills predicting that house prices will rise by 25% over the next five years, this could be an interesting opportunity to get a foot on the ladder.
For more information, visit apieceoflondon.co.uk
Miranda Wadham on 28/09/2015