The crowdfunding platform launched today and said it hopes to raise £20m from private individuals in its first year.
The scheme takes a minimum investment of £500, with the firm anticipating returns of 5-11%. Borrowers will typically be property professionals who wish to finance a new property project or refinance an existing one.
This includes development projects, project refinancing and buy-to-let investment refinancing, the firm said.
Borrowers can apply for up to 100% finance on new developments at 9-11% p.a. or up to 80% loan to value for refinancing projects at 5-6% p.a, depending on proprietary criteria. For each transaction, CrowdProperty takes a one-off 3-5% arrangement fee from the borrower.
CrowdProperty said following the direct-to-consumer launch it would pursue a distribution strategy with financial intermediaries which would offer commission to brokers who complete a case using the platform.
Founder and director of CrowdProperty Simon Zutshi said: “Our inspiration for CrowdProperty came from a very simple understanding of the current problems facing many people in a climate of exceptionally low interest rates and increasingly tight lending restrictions from traditional high street lenders.
“Many property professionals in the UK were not getting the money they needed to make profitable property developments happen and most everyday people were not getting as much interest as they would like from their savings. The answer was simple: give people a better return on their money by allowing them to directly lend it to property professionals looking for funding.”
