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Research carried out by one of our sister sites Letting Agent Today has highlighted the increased influence of crowdfunding in the property investment sector.
 
There are now at least seven significant ‘crowd-funding platforms’ aimed at buy-to-let investors: Crowdtolet, House Crowd, Crowdahouse, Propertycrowdfunding, Crowdfundproperty, Propertymoose and Crowdsourcing.
 
These sites’ primary aim is to raise funding by attracting investors who may not be able to afford a deposit on a BTL property, or who do not want to risk such a large sum in one property or location.
 
Investors pay, usually in £250 or £500 increments, to invest in a property or a group of properties promoted on the platform’s website. 
 
Each investor typically receives what is effectively a share, or shares, certificate equivalent to the sum invested. These shares are issued by a Special Purpose Vehicle - financial jargon for a limited company which is the vehicle under which the property is subsequently purchased. 
 
PIT has previously reported on numerous crowdfunding property projects, including one in Liverpool, innovatively named 'cloudfunding'.
 
Most recently, Online estate agent Hatched wants to attract £250,000 in investment through crowdfunding in order to expand beyond its existing seven offices in Hitchin, Sheffield, Manchester, Birmingham, Reading, Maidstone and Exeter. In return for a five per cent share of equity, the investment secured through the Hatched crowdfunding campaign will be put towards recruiting 35 so-called ‘field agents’ within the next year. 

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