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
CrowdProperty Review: their best-rated lending account
This account has been paying 7.73% interest after bad debts.
When did CrowdProperty start?
Established in 2015, lenders have lent £130 million to around 50 different borrowers in over 167 loans.
What interesting or unique points does CrowdProperty have?
CrowdProperty is mainly 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. Since early 2019, it's also offered short-term (bridging) loans to developers, e.g. for purchasing land or property.
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.
CrowdProperty during COVID-19
CrowdProperty has needed to roll some existing loans over into new loans due to the pandemic, as the borrowers were unable to complete developments on time or face delays in selling their properties. Most of the loans have been partially repaid and 4thWay finds that CrowdProperty's loans look in good shape.
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.
CrowdProperty accepted its first bridging loan in early 2019 and has arranged just a few score of them so far. More time is needed to see how good they are. I hope and currently expect that CrowdProperty's strong ability to assess developers will make up for the the maximum bridging loan allowed being as much as 75% of the property value. That's not too high per se, but it's higher than we'd ideally like in the lowest risk lending.
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 7.73% 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.
CrowdProperty's development loans have the top 4thWay PLUS Rating of 3/3, “Exceptional”, meaning that we expect that lenders will make money even when impacted by a severe recession and property crash. CrowdProperty's bridging loans are too new for us to calculate, so they are excluded from the rating for the time being.
Has CrowdProperty provided enough information to assess the risks?
CrowdProperty provides 4thWay with all the data and direct contact we need, and also volunteers 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 March 2019. We have no more recent company accounts.
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.
CrowdProperty: key details
4thWay PLUS Rating
Interest rate after bad debt
Here we show the P2P lending site's own estimate
4thWay Risk Score
Lower Risk Scores are better. How is this different to the 4thWay PLUS Rating?
CrowdProperty Quick Expert Review: development lending as a low risk, high-interest rate opportunity
Established in 2015, lenders have lent £130 million to around 50 different borrowers in over 167 loans…Read the full review here
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