Downing Crowd launches first property development bond

By Ryan Weeks on 11th December 2017

P2P/Marketplace Lending

The bond will offer exposure to a number of loans from Funding Circle’s closed-down property loan-book.

Downing Crowd launches first property development bond

The bond will offer exposure to a number of loans from Funding Circle’s closed-down property loan-book.

Downing Crowd, a platform known for its renewable energy bonds, has entered the property development market.

Its first issue, the Downing Development Finance (DDF) Property Bond, has been launched to address the funding gap faced by small and mid-sized enterprise property developers. It will offer investors either 5 per cent per annum across a 1-year fixed term, of 6 per cent across two years. The bond may also be held within an Innovative Finance ISA wrapper.

The company has hired a number of property investment specialists to support the new product, including former Funding Circle employees Hannah Kenny and Parik Chandra. Downing will also be carefully selecting a number of loans from Funding Circle’s P2P property loanbook, which the P2P business lender has been winding down since April. These loans will be included in the DDF portfolio.

In addition to these, Downing will use the proceeds of its new bond to fund a range of residential property developments such as pubs and care homes.

“We believe the new DDF Property Bond can offer investors something really unique in the popular world of property investing,” said Julia Groves, partner and head of crowdfunding at Downing. “Unlike some other platforms that offer this type of property lending, we offer fixed rather than target rates, so investors know what returns to expect. The fixed term of the Bond also means investors know when they should get their capital back.”

The annual fees charged by Downing LLP for management of the bond will be capped at 2.0 per cent per annum.

The crowdfunding investment platform’s parent company Downing boasts a track record of having lent over £250m to UK development projects since 2010. £41.6m has been invested via its crowdfunding platform to date, according to AltFi Data. 

Citing a survey, Downing highlighted the fact that 54 per cent of SME housebuilders see a lack of financial support as the second biggest barrier to building new homes – underscoring the need for innovative solutions. 

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