Property investment platform

Are there too many property investment platforms?

A recent poll conducted by Development Finance Today revealed that 65% of industry professionals believed that there were too many property investment platforms in the market.

One industry professional agreed and stated that there were now probably too many property investment platforms with disparate offers.

Property investment platforms allow investors to invest in individual properties or a property portfolio.

Bronwen Vearncombe, director at Property Investing Foundation, said that there were a lot of online investment platforms out there, many of which promised very high returns to grab investors’ attention.

She believed that it was hard to decipher which ones were the best and how they worked.

“To be confident in investing with any of these companies you must do your due diligence. 

“I’d feel happier if the company is: a) authorised and regulated by the FCA, b) run and managed by property experts, and c) recommended by others and has a faultless payback track record.”

Stuart Law, CEO at Assetz Capital, added: “Property investment platforms have begun to sprout up over recent years in many guises.

“The general theme is providing retail investors with access to property investments of various types through either loans or equity stakes.

“Crowdfunding, P2P lending, real estate investment trusts and bonds all feature in this market.

“Whether there are too many of them is a different question, and it probably comes down to whether there is a true market need for their services.

“We are also in the process of creating a platform that will bring new housing into the market for sale and rent, which is a key part of the solution when it comes to the housing crisis.”

Marc Trup, founder at property management platform Arthur Online, said: “In any free market, demand attracts supply, more supply means more competition, which in turn means more options, better service and lower prices.

“Modern consumers are overwhelmed with choice, and in the complicated world of property investment – where poor choices can lead to financial ruin – a simpler world may actually be better in the long term.

“Ten years ago, property investment was largely the reserve of the cash rich, but now anyone can invest in property with just a few hundred pounds by taking advantage of new innovations in property investment, such as crowdfunding platforms.

“Unlike a savings account, money invested is tied up for the duration of the investment, which may be up to 10 years, and there is no guarantee that the other investors would want to sell at all.”

Mark Homer, co-founder of Progressive Property, added: “There are probably now too many property investment platforms with disparate offers.

“As most will look to choose a strong operation with [a] strong brand – which is time-tested and has ironed out many of the issues with the investment process – consolidation with a focus towards stronger operators is due.

“They can be attractive to investors as they offer almost nil time input requirement for choosing and managing the investment as most investment decisions are removed from investors.

“In my experience, investors are best placed to make their own investment decisions, as leaving this task to others usually ends up with lower-achieving, lower returns or even large capital losses.”

Henry Smith, CEO at Aitch Group, highlighted that the property market was an ever-changing landscape with new policies and hurdles to deal with.

“To remain dynamic, exploring new investment models is an essential part of the property; although not each model will be suitable to every business.

“Provided the risk is calculated – at a sensible rate and there is no overexposure – the variation of investment platforms should be sustainable.”

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