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CrowdProperty Review

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By on 25 March, 2019 | Read more by this author

Here's the CrowdProperty review from one of 4thWay's experts:

4thWay's Quick Expert CrowdProperty Review

Development lending as a low risk, high-interest rate opportunity

When did CrowdProperty start?

Established in 2015, lenders have lent £40 million to around 50 different borrowers in over 80 loans.

What interesting or unique points does CrowdProperty have?

CrowdProperty is single-mindedly (in a good way) focused on the lowest-risk kind of property development lending to experienced developers, offering first-charge lending only against developments that already have planning permission.

CrowdProperty has told us that its own experienced founders will step in to run development projects to completion, if necessary. Developers borrow all the money they need at the start, but CrowdProperty releases it in phases after careful consideration of the developers' progress.

How good are its loans?

CrowdProperty assesses the developers' experience and the development project's details, accepting only the best. Unusually for these kinds of loans, CrowdProperty also takes a quantitative approach, learning from data and relevant numbers. I am confident that these approaches combined ensure a high loan quality. The average loan is for less than 70% of the starting valuation of the site, which is considerably better than normal for these loans.

How much experience do CrowdProperty's key people have?

The key people at CrowdProperty have clearly demonstrated the talent and deep experience needed to properly assess complex development projects, monitor them, keep them on track, and take steps when things go wrong. I believe they are fanatical about maintaining quality.

CrowdProperty review: lending processes

CrowdProperty has talked us through much of its near 60-step lending criteria and it has convinced me that it constantly improves its already excellent processes. It is critical of the progress of projects throughout. It has also talked through what steps it's taken for every loan that has ever fallen substantially late, and it has found elegant solutions to ensure lenders received all their money and interest in the end.

How good are CrowdProperty's interest rates, bad debts and margin of safety?

For these top-quality development loans, the interest rate of 7.70% provides a high margin of safety for lenders who put a small proportion of their money in any one loan. A handful of loans suffered problems that were dealt with swiftly.

Has CrowdProperty provided enough information to assess the risks?

While CrowdProperty was initially slow to provide 4thWay with direct contact and the vast amount of information along with the data we need, now that it has found the time to do so, it's been volunteering a great depth of information before we are even able to ask for it. It's provided more than enough information to assess it, and has committed to doing so in the future.

Is CrowdProperty profitable?

CrowdProperty roughly broke even in the year up to March 2018 and it forecasts a similar result this year.

CrowdProperty has exclusive access to a large, direct market of property developers, so it doesn't have to pay fees to loan broker, which can be very expensive. It seems well placed to become a profitable and stable P2P lending site.

What is CrowdProperty's minimum lending amount and how many loans can I lend in?

If you choose loans for yourself, the minimum you can lend per loan is £500. If you use auto-lend, you can lend as little as £50 per loan, although you must contribute at least £500. I believe it could take six months or so before your money is lent in enough loans, so you might want to drip your money in over that period.

Does CrowdProperty have an IFISA?

CrowdProperty's lending accounts are available as IFISAs.

Visit CrowdProperty.

CrowdProperty: key details

4thWay PLUS Rating
4thWay PLUS Rating 3
Interest rate after bad debt
7.91%

Here we show the P2P lending site's own estimate
(or 4thWay's if theirs are not appropriate)

4thWay Risk Score
4/10

Description: £40 m in development property lending & short-term property (bridging) loans since 2015, with optional auto-lend & auto-diversification. IFISA available

Minimum lending amount
£500
Exit fees - if you sell loans before borrowers fully repay
N/A

Early exit is not guaranteed. Usually, other lenders need to buy your loans

Do you get all your money back if you exit early?

N/A

Loan size compared to security value
60.80% (avg) and 70% (max); or 53.10% (avg) 70% (max) of future property value
Reserve fund size as % of outstanding loans
N/A
Company/directors lend alongside you/first loss
No
CrowdProperty Quick Expert Review: development lending as a low risk, high-interest rate opportunity

Established in 2015, lenders have lent £40 million to around 50 different borrowers in over 80 loans…

Read the full review here

Independent opinion: the opinions expressed are those of the author and not held by 4thWay. 4thWay is not regulated by the ESMA or the FCA, and does not provide personalised advice. The material is for general information and education purposes only and not intended to incite you to lend.

All the experts and journalists who conduct research and write articles for 4thWay are subject to 4thWay's Editorial Code of Practice. For more, please see 4thWay's terms and conditions.

Our service is free to you. We don't receive commission from the above-mentioned companies. We receive commission from some other P2P lending companies when you click through from our website and open accounts with them. This doesn't affect our editorial independence. Read How we earn money fairly with your help.

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Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers two “bonds”, one of which is available as an ISA.

Unlike its P2P lending service, neither of these bonds allows you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

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Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers two “bonds”, one of which is available as an ISA.

Unlike its P2P lending service, neither of these bonds allows you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

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This is because we calculate Orchard’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

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Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers “bonds”. Unlike its P2P lending service, its bonds don’t allow you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

×
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