There’s a new platform within the dynamic UK peer-to-peer property lending space.
Property Partner – which has yet to fully launch – has kicked off life in the alternative finance world with a £1.25 million seed fundraising round. The investment round has been led by Octopus Investments – with a number of other participants involved including Seedcamp, Betfair Co-Founder and Funding Circle Board Member Ed Wray, and Better Capital Founder Jon Moulton.
The new platform was founded by Daniel Gandesha – a Chartered Accountant who became disillusioned with the current state of affairs in the buy-to-let industry. Gandesha commented:
“Buy-to-let has many hurdles which put people off, including the significant up front cash requirement, exposure to unexpected costs, administrative burden and legal obligations.”
Property Partner will allow its investors to co-fund buy-to-let properties. In an unusual twist, the platform will launch with a secondary market already in place – although the benefits of this loan-trading forum won’t take effect for a while. Residential property is the UK’s largest asset class – worth over £5 trillion. Buy-to-let transactions alone top the £20 billion mark each year. Peer-to-peer lending is muscling in on an increasingly significant slice of the UK property market. According to AltFi Data, the three largest players in the UK peer-to-peer property lending sector – LendInvest, Wellesley and Assetz – account for £237.5m between them at present and represent the fastest growing area in the P2P lending arena.
Although these three platforms are more focused on commercial property development, there are also a number of up and coming players in the residential arena. Landbay, Property Moose, Crowd Property and even Funding Circle – which is of course ordinarily focused on SME lending – are all scaling up their residential property funding operations. Property Partner becomes the latest contender to try and carve out a significant share of this nascent but already fiercely competitive space. And with £1.25m already in the bank, they might just have a chance. Octopus Ventures, the main provider of that £1.25m, shared some insight:
“Octopus looks to invest in people with the potential to build big businesses that can transform an industry. We’ve been extremely impressed by the progress his team have made in a relatively short period of time. We’re also very excited by his unique take on property crowdfunding and long-term vision for the business.”