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Housemartin’s P2P Lending Account And IFISA And Classic Account has earned an Exceptional 3/3 4thWay PLUS Rating. These loans have been paying lenders around of the loan amount in interest, after bad debts. Visit Housemartin* or keep reading the Housemartin Review.
Through Housemartin*, you lend money to purchase properties to be used by charities and housing associations – as tenants – which are often backed with government funding.
The people living in the properties are subtenants who might be disabled people and their families, asylum seekers, children with learning difficulties in children’s homes, and more.
The subtenants are in the supported-housing scheme. This means they receive in-person support or social care, not just a place to live, sometimes with an extra room in the property set aside for overnight carers.
The interest you earn is based on the rent the tenant organisations pay, which usually rises with inflation** or otherwise moves with local rents.
You could also make money when leaving the loans, as you benefit from rising property prices – or lose money with price falls – rather like if you were a co-owner of the property yourself.
For a shorter version of this Housemartin Review, open it up in the comparison tables.
Housemartin started in 2019. The total amount lent through it is £28 million.
Each deal you get through Housemartin* is different, but I’ll give you an example:
For some extra clarity, let’s follow the money:
There are unique areas that I need to go into in some detail:
How Housemartin arranges that you as the lender get your money back first.
How your property lending blurs the lines with owning property.
The quality of the housing and service for the people who live in the properties.
See the section How good are Housemartin’s returns, bad debts and margin of safety?
Usually, when a borrower gets a property loan, it’s secured with a first legal charge on the lender’s behalf.
This means that, if the borrower is unable to keep meeting its commitments to you, you’ll usually expect your loan amount and interest to be repaid first. The property will be sold and you’ll get your money before anyone else who the borrower owes.
The property loans through Housemartin, most unusually, are unsecured. Unsecured property lending is not completely unheard of, but you need to understand how you’re protected instead.
Each specially created company set up to hold one property borrows money exclusively from you and other lenders in the same loan. It avoids having any other debts with anyone else. (That is, in all but extreme circumstances.)
As this shell company doesn’t have any sales, advertising, product development, HR or other costs, it’s usually very easy for it to avoid further debts.
What’s more, that company is protected in the event that Housemartin goes out of business, i.e. it won’t get taken down by Housemartin’s own debts.
So long as Housemartin* maintains this setup correctly, this is very nearly equal to secured lending. More on all this in Is Housemartin truly P2P?
“Be the landlord but without the hassle,” writes Housemartin on its website.
That should give you the first clue that this isn’t ordinary lending.
A landlord owns property – and perhaps borrows money to do so. Lenders lend to the landlords.
And, indeed, through Housemartin, you are lending your money.
So in what ways is your lending actually like lending, and in what ways is it like being a landlord? I’ve come up with this checklist to help you understand the key points:
Is it you who:
With Housemartin, you might need to commit for longer. This is always the case when your total returns are linked to property-market prices.
That’s why it makes sense to lend through Housemartin if you’re prepared – if necessary – to lend for considerably more than three years. You’ll need to give property prices sufficient time to recover from any downturns, so that, at the very least, you’re highly likely to be satisfied with your overall returns after interest.
Charities that Housemartin* works with contribute to helping it find the right sorts of properties for their subtenants. For example, if Housemartin has found a potential property to buy, a charity might reject it on the basis of its local knowledge of drugs in the area.
Even so, for this review I consulted an expert on social care and supported living. She said supported housing providers certainly don’t always get this right and don’t always provide a safe environment for tenants.
On her advice, I looked into several of the providers Housemartin uses. In particular, I sifted through reports from the Care Quality Commission and other sources. While it’s not easy to find many examples, the providers I investigated had positive coverage, or at least no negative coverage.
I did find examples of other providers not used by Housemartin where the Care Quality Commission did not hold back on its criticisms, so it does appear to be tough on poor care. In other words, I saw no reason to believe the commission shields poor supported housing providers.
On the evidence I’ve seen, I think we should feel reassured that Housemartin’s approach and its partners are ethically responsible.
Again, with the Housemartin model being so different to other P2P lending, I’m going to have break this down into subsections:
Housemartin’s tenants have a pool of income to meet your interest payments.
How safe are your interest payments?
Loan size compared to property valuation.
Net yield – the income you make vs. the amount you put in.
Housemartin’s tenants – charities and housing associations – typically have rental payments coming in from many subtenants. That rent is usually paid for with housing benefit. The tenants also receive subsidies and grants.
The interest you receive isn’t directly linked to the subtenants living in the properties you’re funding. Rather, the tenants have to pay you regardless of whether the subtenants pay.
In other words, all the rent your tenants receive from all their subtenants, in all their properties, plus some grant and subsidy money, can be used to pay you your interest.
I’ve looked into the financial health of some of the supported-housing organisations that partner with Housemartin*. All those I looked at have reassuringly high cash reserves.
In terms of rent, at least one of them suffers sufficient defaults on rent from subtenants to actually make a loss on housing. But it turns the bottom line into a positive figure through the support services it sells on top, usually paid for by the taxpayer.
That’s not optimal, but it’s kind of like how car insurance has worked for most of the past few decades. Some insurers lose money on it, but they make an overall profit by selling other insurance services on top.
Our supported housing expert says that, in her experience, no charity or housing association in this space has been shut down due to quality concerns or even financial concerns.
However, sometimes specific housing is deemed unsuitable. In the worst cases, the housing needs to be shut down, with the people living there provided places elsewhere.
Social care has been hugely neglected by politicians, the media and the public. (I’m not trying to be political, but explaining my assessment of the risks for lenders.) Even so, the law requires that local authorities meet some strict standards. So they desperately need these services and indeed they need more housing, not less.
It seems unlikely that the government would suddenly, substantially reduce grants and subsidies for supported housing, due to the catastrophic social and legal issues it would cause.
Even so, from time-to-time you should expect some of the various local schemes to end abruptly as local needs and resources change. This means that the tenancy might be cancelled with a few months’ notice, where the tenant has an early exit clause (a break clause) in the contract. When that happens – and it has happened once – Housemartin will look first to get the properties incorporated into other supported-housing schemes before considering further options for the property.
Many of the charities and housing associations involved in this kind of housing are so sure they can pay their rents, and so confident that sufficient taxpayer funding will continue, that they even describe it as “guaranteed income” for people like you, who are funding their housing through loans.
Even the provider I found that was making a loss on housing, before support services fees, calls it guaranteed income.
Clearly, there’s no such thing as guaranteed income. Indeed, the charities’ own risk assessments find that the biggest risk factor to them is government policy changing, which could impact subsidies, for example. But this income is certainly a lot safer than relying just on the residents of the properties to pay you all by themselves.
Usually, as lenders, you lend a proportion of the property price. It might typically be, say, 75% of the property’s valuation.
With Housemartin, you’re lending the full property price, plus fees, plus costs, plus the contingency fund for repairs.
You’re therefore overexposed, sometimes lending the full property price plus one third on top. This is more like a landlord’s exposure to risk, which is usually substantially greater than the risk to property lenders.
On the flip side, the interest rate you earn is based on the higher figure of the total amount you have lent, not the property’s valuation. Plus, you’re benefiting from the vast majority of the rent – and a higher proportion of the overall property returns than you would usually expect as a lender.
My latest assessment finds that the starting contingency funds – which are paid for by the original lenders – do get used up over time, at varying speeds. Indeed, at least three properties have used up their contingency funds. Additional costs on top for one of those will add up to a full year’s interest in costs for lenders.
That said, the data supplied by Housemartin shows that lenders appear to be willing to trade loan parts on its secondary market at around the original loan price.
In other words, they appear to be able to pretty much pass on all the initial fees, contingency pot and other costs they had to pay when the property was initially purchased to new lenders when selling their loan parts. This is not normally the case when you’re selling a property to someone else, since they will just pay you the agreed value of the property, and not your past costs for the property.
Loan size compared to property valuation is the usual main indicator of loan quality when you’re doing property lending.
However, there’s a strong argument to consider net yield as the first indicator of deal quality at Housemartin*, due to its correlation with being a landlord.
You calculate net yield from:
1. The income you make from the property and
2. The total amount of money you’ve put into the deal.
The income you make is the rent paid, minus fees to the property manager (Housemartin), insurance premiums and other ongoing costs.
The total amount of money you’ve put into the deal is the purchase price, purchase costs and expenses, purchase taxes, up-front fee to Housemartin, and a contingency for repairs.
So, if you and other lenders are collectively getting £10,000 interest per year (before any income tax) on a £200,000 loan, that’s a 5% net yield per year.
Housemartin lenders are paid all the net yield as interest on your loans. Lenders are earning an average net yield of around 7% at present. (So earning £70 in interest per year for each £1,000 you lent.) It’s rarely dipped below 5% on any loans.
Data collated by Inventory Base*** shows that landlords in all regions of Great Britain usually earn less than that. In fact, in most regions, they earn under 4% in rental income. And that’s before accounting for property-management and other costs. The Housemartin net yield already accounts for those costs.
Some other sources estimate slightly higher average yields in some cities or local areas, but clearly this is an excellent return when you’re taking part in such a stable investment as property.
A key person in the in-house team is himself both a property developer and a landlord with his own buy-to-lets, but we haven’t been provided any evidence of any lending experience or professional property investing experience.
In most cases, my team and I are negative when there’s little experience, and that is often borne out in the results the P2P lending companies ultimately provide.
However, through interviews, and other varied and detailed analyses we do of individual P2P providers, we sometimes have excellent reasons to look beyond past experience. And so far we’ve got a perfect record on calling that, too.
We’re sure of our assessment of Housemartin: the kinds of loans it does with charity partnerships are relatively simple, and I believe the key people have the integrity and ability to do the job.
I am pleased to see that they have learned quickly from their mistakes, which included going ahead with a deal despite being unable to get a survey of the property (a huge rookie error that they will no longer do), and accepting a few development loans and regular short-term tenancies that they shouldn’t have done.
Its biggest mistake was being pressed by a former board member into a risky development loan, but Housemartin itself has taken on the six-figure cost overrun so that lenders are protected.
They’re now focusing just on supported living and Housemartin has taken the hit itself for those mistakes, rather than pass them on to lenders.
What’s key is Housemartin’s assessment of the property, the charity and the rent.
Housemartin* caps the price it pays for any property at the valuation provided by an independent RICS surveyor.
While its favoured holding period for a property is forever, it also wants the property to be likely to increase in value. This gives lenders extra safety over time.
That safety could be important, because lenders are lending the full sale price of the property, plus fees, costs and repair contingencies. You’re therefore overexposed at the start.
Unexpected expenses will usually be covered by lenders’ funds, preferably deducted from the rent received before the difference is passed to you in lending interest.
That’s on top of the pot of money taken in advance from loan money for repair contingencies. For these reasons, Housemartin is looking for properties that aren’t likely to require a lot of work, such as repairs.
So far, most property’s contingency funds have more than covered all the needs and they mostly remain pretty well funded, although it does vary.
In terms of monitoring, Housemartin provides lenders with updated property valuations from time to time. This has no doubt aided lenders when setting prices for their loan parts and then selling them – usually for a nice additional profit.
The value of each loan is inextricably linked to the property price, because the final lenders at the time a property is ultimately sold will take the profit from that sale.
More time is needed to see how well Housemartin recovers any tenancy arrears that arise. But this is in any event outsourced to whoever Housemartin hires to manage the property.
On that front, Housemartin has thoughtful processes in selecting suitable property managers.
Another point worth mentioning is that Housemartin mostly uses five or six charities and housing associations. While that’s quite reasonable, I’d like to see them take on board a larger number of partners.
Once again, there are a lot of moving parts here. So I shall split this into subsections:
Interest earned by lenders.
Bad debts.
Caps to profits on sale and the provision fund for bad debts.
The risk-reward profile shares commonalities with buy-to-let investing.
Margin of safety.
Over the most recent 12 months, the average interest received by lenders entering at the start of new loans has been 7.33%.
Lenders have typically made profits on selling their loan parts, since property prices usually go upwards. On average, the uplift so far has been meagre, but we have just been through a flat period in property prices.
Loans held for at least a few years, however, have seen lenders who sell loans early add perhaps a couple of percentage points to their returns.
Losses arise when Housemartin attempts to sell the properties and is unable to sell for a price that covers all the outstanding loan. This has happened four times.
One of those four was because the lenders voted to sell, i.e. it was self-imposed. They did this for strategic reasons, as they wanted to lend elsewhere for a higher return. Interest earned roughly covered the losses.
On each of the other three loans, the interest earned on the loan greatly outweighed the losses on it. Furthermore, these three loans were not Housemartin’s primary type of lending, but more standard kind of housing that they fluttered with in their first 12 months as an online lending platform.
Housemartin has had some trouble with a few loans, such as non-paying tenants, but these are mostly with those earlier property deals that it no longer gets involved with.
Housemartin* has sold nine properties. When a property is sold, lenders’ profits are currently capped by the financial regulator at 3% compounded per year.
So, if the total lent was £100,000 and the property was sold after 10 years, the maximum profit you could make would be £34,400.
Since the property value on a £100,000 loan probably started closer to £80,000, it means that the property price would have to rise about 45% in the ten years before your profits were high enough to be capped.
If there are excess profits on a property sale above this cap, they are diverted into a provision fund. This will provide extra protection to cover bad debts across all remaining loans.
No property sales have led to profits exceeding the cap, so the provision fund currently stands empty.
As of 2025, Housemartin now has a five-year history and indeed is already closer to six years. This history confirms a long known truth about property investments that are linked to property prices: five years isn’t long enough if you want to be confident that property-price changes will lead to an enhanced return over-and-above the monthly income you’re earning.
The past five years overall have included a rather poor time for the property market. Just as if you were a landlord, you should therefore prepare to hold for even longer if you want price changes to boost your returns. In the meantime, it wouldn’t be bizarre for price changes to eat at least somewhat into your gains through income. That has happened to some extent to lenders through Housemartin.
In a way, this is strangely reassuring to me, in that it’s exactly how you’d expect it to work at Housemartin and so it provides a good opportunity to show lenders in future that they would do well to consider it a long-term, lend-and-hold investment opportunity.
We are able to conduct all our full, quantitative assessments, thanks to very detailed data and access provided to us by Housemartin.
The loan amount compared to the property valuation starts high, but the overall safety features in this kind of lending, plus the decent rewards, more than makes up for it.
Lenders who panic and sell during a crash could bring unnecessary losses upon themselves, especially if you haven’t yet been lending for long enough to see property prices rise and to earn interest to cover the downsides of selling at that time. Those losses would be an error in your strategy, not a weakness inherent in Housemartin or the quality of its loans.
There’s no cap of 3% compounded profits when you sell existing loan parts to other lenders, because you’re setting the prices yourself – although Housemartin will attempt to set reasonable limits for each loan to prevent the craziest sale prices.
My suspicion is that in trading loan parts you’ll often find someone to buy off you based on the latest property valuation provided by Housemartin, even if it adds up to more than the 3% annualised cap.
However, if you’re the buyer and not the seller, you could contain risks for yourself by not buying second-hand loan parts at a price that works out as much more than 3% per annum compounded over the initial loan price.
Housemartin believes that the risk of profits being capped is small, but that remains to be seen. So do watch the price you pay for your second-hand loan parts.
Housemartin* provides us with full access to key people for interview, and it has answered a vast number of questions. It provides very high quality, detailed data to assess its performance. It’s offered the commitment to provide it in future and it has begun doing so.
For the public, it provides an awful lot of information on its website, although it doesn’t say anything about their personal backgrounds and experience. (Perhaps not surprisingly, if you’ve read my section on that).
It provides useful public statistics on its website for prospective lenders, but it needs to keep them much more up-to-date.
For lenders who are signed in, it gives you a huge amount of information and details, mostly in a clear way. It focuses your attention on the most important elements.
It’s quite complicated for you to assess lending opportunities, but Housemartin has been thoughtful in how tries to make it easier for you.
Published company accounts don’t yet reveal many details.
Housemartin told us previously that it was profitable since part way through 2021. However, my best guess based on available evidence is it slipped into a loss again in the past two company years, ending in October 2024. It’s not unusual at this stage in its life.
Security provider Sucuri has conducted a soft probe of Housemartin’s website and finds it has no malware and considers Housemartin to be a low security risk for lenders.
Sucuri identified just a few very minor potential weaknesses in the logged in area, which can be easily rectified and are not easily exploited.
The core site technology is up-to-date and Sucuri could find no server errors (meaning the computers that its website run on appear to be configured correctly).
In stark contrast to many other hybrid investments, the overall concept of lending/owning that Housemartin* has developed is excellent and well constructed.
I’m looking forward to seeing it extend the existing five- and 10-year leases its arranged with supported housing providers. I strongly expect no issues on the majority of loans, and that it will continue to demonstrate it’s a very solid, good investment.
More than that, it’s like nothing else in your P2P lending portfolio – or even your entire investment portfolio. So it adds a good dose of diversification, which reduces risks to you.
Lenders just need to watch for themselves that they don’t pay too high a price when buying second-hand loan parts.
You can lend as little as £1.
Yes, at no extra cost.
Yes, if someone is willing to buy.
The amount you get back for your loan parts is agreed between you and the buyer, although Housemartin will cap the price if it’s too high. Housemartin has no formula for these caps to make them predictable.
Housemartin will suspend sale of a loan in some cases, such as if there’s an upcoming vote to sell the property or if the tenant defaulted on rent. It also briefly suspends trading when there are events like an announcement of repairs that need to be funded from the contingency pot.
As usual with all P2P lending, any early exit feature could be completely shut down or unworkable at times, e.g. during severe economic downturns or during events specific to the types of loans you’re doing.
This is completely normal and not usually indicative of failure at the P2P lending company. So, if that thought bothers you, you should either lend less money, or not lend at all, through P2P.
A 4%-5% up-front arrangement fee, taken out of your loan, is not a small amount. But neither is it obscene for these long-term loans.
Housemartin takes a monthly fee from the rent received. This can be as low as 6% of the rent or as high as 17%, but it’s generally between 10% and 15%.
All those lending costs work out competitively against the most similar lending platforms. I estimate total costs to you are the equivalent of less than 2% of your lent amount per year. The returns I’ve mentioned earlier of 7.33% are already after those total costs are deducted.
When you log in to Housemartin and see the individual opportunities that are listed, all the rent-and-return figures shown are after Housemartin’s fees have already been deducted.
Housemartin also charges 2% of the property sale price when lenders vote to sell a property and the property is sold.
Assetz Capital’s CEO, Stuart Law, used to be a director of Housemartin and was its largest single shareholder. With much pressure from Housemartin, which wanted to distance itself from Assetz Capital over its treatment of lenders on its own platform, Law resigned from the board in May 2024. As of September 2024, he is also no longer a shareholder.
In addition, some of the wealthy lenders using Housemartin have become shareholders in Law’s stead. This appears to closely aligns the interest of lenders with the management and my investigations confirm that this is likely to be the case. Everyone appears to be delighted with this outcome.
The personalities left runnning Housemartin and owning shares in it are very different indeed to those running Assetz Capital. I consider it highly improbable, for example, that the people at Housemartin would try to pass on higher costs to you if it decided to switch its strategy and wind down its P2P lending.
Assetz Capital was lined up to help run Housemartin down in the event that it went out of business or decided to close down its P2P lending business.
The plan no longer involves Assetz Capital. Near the end of 2024, Housemartin drew up a new wind-down plan and submitted it to the FCA for approval.
Now, Housemartin plans to continue running the loan book during any scenario when it closes down. Housemartin will cut all sales, marketing and other costs related to growing the business. The ongoing fees it earns from existing loans will normally be sufficient to cover the costs of wind down up to the point the properties are sold and the loans repaid, or up till the time when another company buys the entire portfolio from Housemartin.
That’s a sensible and realistic approach for Housemartin, as it is for many other providers. It’s also my first choice for how I’d like to see it handle an ordinary wind down.
However, Housemartin makes no specific plans in the event that it goes bankrupt, which I would prefer to see. Such a plan would help ensure that administration costs don’t skyrocket when the receivers take over. (Receivers are specialist firms who are appointed to deal with the closing down activities of bust companies.)
A specific plan for such an event might also help ensure you maintain all the protections that you currently get through Housemartin’s existing regulatory and ISA permissions.
In addition, Housemartin doesn’t have a segregated cash account with a protected cash pot reserved solely to support a wind-down scenario. That would have been preferable, although it’s also expensive to tie up cash in that way so fairly normal.
There are a lot of different legal structures in P2P, but Housemartin’s takes some getting your head around.
It’s also on the edge of what we’d call P2P – or even lending. To the extent that people writing marketing text on Housemartin’s own website describe it as an equity investing opportunity – which would mean you’re becoming an owner of the property, rather than a lender.
Legally speaking this isn’t true: you’re most definitely lending and it’s peer-to-peer. In practical terms as an investor, you’re getting some of both.
Here’s how it works:
Housemartin sets up a specially created limited company for no other purpose than to buy and own a single property. That company won’t do any commercial trading or sales, marketing, or other business activities.
Although each special company is separate from Housemartin, they’re all owned by it. It’s unusual for all the borrowers in P2P lending to be owned by the P2P lending provider itself like this.
However, Housemartin’s own profit in those companies is limited.
Equally importantly, these companies are what’s known as special purpose vehicles (SPVs). These are “bankruptcy remote”, meaning that, if the company that owns the SPV goes under, it won’t drag the SPV down with it.
The bottom line is that banks owed money by Housemartin can’t take your loan money or interest away.
I hope you’re keeping up. I’m not done explaining the structure. Next:
You make a loan to that limited company to help it purchase the property. The company takes on no further debt. In the event of the property being sold, all the proceeds (less sale costs) will be distributed in full to you and other lenders, except for profits over the 3% annualised cap.
The loan contracts themselves are article 36H P2P agreements between lenders and each SPV. These are the standard lending contracts that apply to most UK-based P2P lending companies that you see listed on 4thWay.
The loans are unsecured. Technically, then, other lenders to the SPV could muscle in and take some of your money, if the loan turns bad. But the SPVs will almost never have a reason to borrow money elsewhere, since they’re not trading companies and have minimal financial needs.
The only time that another lender will come in is if such extensive repairs are required that the entire contingency fund is used up and interest payments to you are not sufficient to cover the difference.
In that event, Housemartin could allow another outside lender to lend. That outside lender would be repaid before you, as it would provide a secured loan to your borrower. Those secured loans are very likely to be small compared to the initial P2P loan.
Thanks for reading the Housemartin Review and I’m amazed that you made it to the end. Well done, you’re a true investor!
Independent opinion: 4thWay will help you to identify your options and narrow down your choices. We suggest what you could do, but we won't tell you what to do or where to lend; the decision is yours. We are responsible for the accuracy and quality of the information we provide, but not for any decision you make based on it. The material is for general information and education purposes only.
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The 4thWay® PLUS Ratings are calculations developed by professional risk modellers (someone who models risks for the banks), experienced investors and a debt specialist from one of the major consultancy firms. They measure the interest you earn against the risk of suffering losses from borrowers being unable to repay their loans in scenarios up to a serious recession and a major property crash. The ratings assume you spread your money across hundreds or thousands of loans, and continue lending until all your loans are repaid. They assume you lend across 6-12 rated P2P lending accounts or IFISAs, and measure your overall performance across all of them, not against individual performances.
The 4thWay PLUS Ratings are calculated using objective criteria that can be measured and improved on over time, although no rating system is perfect. Read more about the 4thWay® PLUS Ratings.
*Commission, fees and impartial research: our service is free to you. 4thWay shows dozens of P2P lending accounts in our accurate comparison tables and we add new ones as they make it through our listing process. We receive compensation from Housemartin and other P2P lending companies not mentioned above either when you click through from our website and open accounts with them, or to cover the costs of conducting our calculated stress tests and ratings assessments. We vigorously ensure that this doesn't affect our editorial independence. Read How we earn money fairly with your help.
**Using the CPI measure of inflation, which produces nearly identical results to CPIH. The old RPI measure is flawed and usually overstates inflation.
***Inventory Base collated data from Zoopla, ONS, the Commons Library and the Scottish Government.
