A new property crowdfunding platform has launched which offers investors the opportunity to invest from just £500 in large-scale residential property developments.
Homegrown, established last year, is hoping to attract investors by promising to give them access to potentially lucrative returns over a relatively short timeframe.
The strategy behind the company’s latest venture is not to rely on long-term house price inflation or rental yields, but instead to generate returns from construction, where Homegrown believe the ‘real value lies’.
Since launching in autumn last year, Homegrown has released three developments across five projects via the platform within London, namely London Fields in Hackney, Kilburn in NW6 and Limehouse in Docklands.
Each project quickly reached the investment target; they are currently under construction and are projected to generate an average return on completion of 30.9% (14.8% pa) over an average target investment term of 25 months across the three projects.
Anthony Rushworth, CEO of Homegrown, commented: “After the buy-to-let tax changes were imposed in late 2015 we watched the sophisticated property investors move out of the Buy to Let market on mass, towards alternatives like property development and knew there was an opportunity to offer something different to other platforms. This coincided with speaking to property developers on the lack of equity finance being one of the main reasons they weren’t able to build more homes.”
He added: “Joint ventures between equity investors and developers are common but the scale of these projects has historically meant that they have been reserved for a small number of institutional and professional investors, but crowdfunding has changed the investment landscape, and now everyday investors can invest in these projects too.”