Any Clarets invested in property/property finance via one of these platforms?

Not regulated

Spike wrote: ↑

Thu Dec 07, 2023 10:20 pm

Not regulated

What do you mean?

Are you looking for an opportunity to tell us about your investment vehicle earning 10%?

Loyalclaret wrote: ↑

Fri Dec 08, 2023 7:22 am

Are you looking for an opportunity to tell us about your investment vehicle earning 10%?

Not really, there's no commission or referral reward in it for me, also the platform I use is beyond 99% of those who frequent this board on so many levels.

Just wondering if there is any interest in this field, as I'm interested in reading anyone's experience of a platform called Crowdproperty, or a new property buying via crowd funding platform in the London area, called Allbricks. Or any others.

With these kinds of platforms being FCA Registered but not covered by the FSCS, investors should ideally have significant capacity for loss and be prepared to lose up to every single penny they hand over.

I've witnessed people lose huge amounts of money by dabbling in property and getting it totally wrong., most failures is due solely by greed and naivety.

No Ney Never wrote: ↑

Fri Dec 08, 2023 9:39 am

Not really, there's no commission or referral reward in it for me, also the platform I use is beyond 99% of those who frequent this board on so many levels.

Just wondering if there is any interest in this field, as I'm interested in reading anyone's experience of a platform called Crowdproperty, or a new property buying via crowd funding platform in the London area, called Allbricks. Or any others.

I had some involvement when these kind of platforms were initially launched in terms of both the technology and also the risk appetite as part of a product offering for where I was working.
They are not for the faint hearted shall we say.
Extremely high risk and no protection as to your investment.
Being regulated by the FCA offers you nothing really. Getting a license to operate is a process - the high risk nature of the product is kind of irrelevant as long as you make this clear to your customers.
Not sure how the sector is dealt with by the PRA - or whether it comes under their scope / jurisdiction as I have not been involved now for a few years.

Not sure this helps much - but maybe worth a chat with an accountant or your financial advisor if you have one. They may not have that much experience in these platforms but they may know of specialist firms who do. Depends really how much you are thinking of investing as to whether it’s worth paying for the specialist advice

I personally wouldn't go anywhere near these kind of investments because of how high risk they are and where interest rates are at the moment.

I have to ask why a property developer wouldn't be able to access other capital or borrowing and would need a platform like these to access capital.

I can only conclude is that lenders who have more data/insight and experience of property lending don't think the risk is acceptable. So as an individual investor who has little data/insight and understanding - what makes me think I know better than a commercially driven lender?

With interest rates in the region of 5% being available for your capital - quotes of 10% doesn't seem like a big premium for the risk you are taking and having no protection on your money?

These schemes where you are buying a "share" of the development is similar to buying a share in a company with the exception, you have an illiquid asset that could fail to generate the returns and even return you nothing. You can generate 7-10% in much "safer" risk based investments if investing for the medium to long term.

Interest rates are likely to mean properties are harder to sell in this environment and people can borrow less money due to the stress testing and cost of living crisis also meaning the ability to meet those higher payments is driving the property market in a way that I think will show house prices are declining at worst and remaining flat at best.

Clearly, nobody knows anyones situation on here but if you are considering this because you are looking for high risk and is in line with your overall investment strategy, it may be something that fits but for most retail investors, this kind of stuff wouldn't usually be something found in investment portfolios. I would say seek professional advice also.

Companies offering 8 to 10 % returns for perhaps a 4 year period are often incorporated into the purchase price and the target is the investor .. read up on store 1st where the owners have been now banned from selling any investments .. most end up with losing every penny

bfcjg wrote: ↑

Fri Dec 08, 2023 1:03 pm

I've witnessed people lose huge amounts of money by dabbling in property and getting it totally wrong., most failures is due solely by greed and naivety.

You could argue that by design, the whole investment game is based on greed. Making money in this arena is about someone else losing it.

If it’s any assistance I work with an insolvency practitioner whose predominant business is sorting out failed property development schemes and pacifying disgruntled private investors . And for pacifying read being polite patient and explaining until they eventually realise they aren’t getting a penny back.

Walton wrote: ↑

Fri Dec 08, 2023 12:46 pm

With these kinds of platforms being FCA Registered but not covered by the FSCS, investors should ideally have significant capacity for loss and be prepared to lose up to every single penny they hand over.

FSCS is not set up to compensate investment loses, only funds deposited in a FSCS protected account (cash or bonds).
Even your stocks and shares ISA held with the high street banks come with a warning that any investment can go down as well as up and you may not get back some or all of your money invested.
While it's in cash you're covered, the minute you invest it you're not.

Of course different investments come with different levels of risk and it's up to the individual to do their research or seek professional advice.

No Ney Never wrote: ↑

Thu Dec 07, 2023 9:58 pm

Any Clarets invested in property/property finance via one of these platforms?

Things Martin Lewis NEVER SAID, part one: if you want investment advice - log-on on to your local football forum.

If it looks too good to be true, it usually is. Golden rule.

Otherwise banks and pension funds would be lumping on to these killer opportunities. That they are not should tell us something.

I’ll be sticking with my usual stock market tracker funds.

No Ney Never wrote: ↑

Fri Dec 08, 2023 9:54 pm

FSCS is not set up to compensate investment loses, only funds deposited in a FSCS protected account (cash or bonds).
Even your stocks and shares ISA held with the high street banks come with a warning that any investment can go down as well as up and you may not get back some or all of your money invested.
While it's in cash you're covered, the minute you invest it you're not.

Of course different investments come with different levels of risk and it's up to the individual to do their research or seek professional advice.

If you can't even get this information right AND if you believe that investing in an investment based ISAs is the same, I would really challenge you to think if you are the right type of person to be investing in these platforms.

Investment ISAs are usually in funds that are diversified across a number of different assets - so like a OEIC/UT/GIA which has the ISA tax wrapper and therefore when you go to a bank, or a financial adviser to invest in your investment based ISA it is not the same as what you are doing. These types of investments will typically invest in a diverse range of assets to match your risk appetite so for lower risk investors, there will be a mix of equities, bonds, cash etc. For higher risk investors then the equity content will increase and the other assets typically decrease. However even if you went into an 100% equities based investment wrapped by an ISA then you would still have the ability to diversify across a number of different holdings with in it.

What this investment platform is asking you to do is invest in one type of asset (property) and have no diversification of holdings as you are in one development. You could potentially spread across a number of different developments but without FSCS you still have no protection and therefore are still more risky than an investment ISA.

So to correct your understanding around the FSCS - it does offer protection on investments. Yes your money can go up and down still but thats not what the FSCS aims to protect as typically this is what the investment is designed to do. What it protects you against is the failure/fraudulent activity of the firm.

https://www.fscs.org.uk/what-we-cover/investments/

Genuinely - if you have a good emergency fund, secure income, a good mix of savings and investments and this is just play money that you can afford to never see again - no need to worry. However if you are being driven to it because 10% looks interesting and it seems exciting to own property and your wider portfolio and financial planning is not in place - you could be making a decision that will come and bite you on the backside later.

They even have a video example of a property scam on there https://www.fscs.org.uk/what-we-cover/i ... erty-scam/ now I am not saying these platforms are scams but there should be some messages in there about promised returns that look attractive but never materialise.

The housing market dropped by around 5% over the past year. City commercial real estate is in a pickle because of Covid and the fact that many people are working from home as opposed to going into the office; so space is no longer needed.

Given the many economic headwinds (flat-lining GDP, very high UK debt levels, higher interest rates, etc), along with many professional traders, bankers and hedge fund managers fearing a recession in 2024 – many are surprised it didn't happen in 2023 – you must ask is this the best investment to make at this time? If there is a recession, not guaranteed, the likelihood is that the property market will tank.

No Ney Never wrote: ↑

Thu Dec 07, 2023 11:16 pm

What do you mean?

Not covered by FCSC or regulated.
Means that they are not as limited to the truth as regulated financial products.
For instance if a regulated bond quoted a growth rate that couldn’t be achieved the FCA would ban that advert . No such “ regulation “ of property investments

As spike said further up the thread if something isn’t regulated then it can be very dodgy investment.

Plenty off get rich ponies out there waiting to take our money.

As a current Technical Claims Specialist working with the FSCS on their Stockbroker claims workstream, I can confirm that what Clarethomer says above is almost spot on

I would add that if the property investment is held within the wrapper of a regulated product then it will probably be covered by the FSCS if the regulated company providing the advice goes into default.

upanatem wrote: ↑

Sat Dec 09, 2023 5:21 pm

The housing market dropped by around 5% over the past year. City commercial real estate is in a pickle because of Covid and the fact that many people are working from home as opposed to going into the office; so space is no longer needed.

Given the many economic headwinds (flat-lining GDP, very high UK debt levels, higher interest rates, etc), along with many professional traders, bankers and hedge fund managers fearing a recession in 2024 – many are surprised it didn't happen in 2023 – you must ask is this the best investment to make at this time? If there is a recession, not guaranteed, the likelihood is that the property market will tank.

House prices have risen for 2/3 months in a row now.

Not saying you should invest like, but with rents rising again. Landlords will want to snap up any property that comes on the market.

Investments are all based on risk.
It is gambling and is just like the 3:30 at Newmarket you can lose it all.

I invested in northern rock, a bank. It went bust, money gone.

Way more save than some dodgy property investment ., but still lost it all.

You can get 5.8% from metro bank at the moment that’s protected. No risk for 85k.

If the going rate around 5% in deposits isn't enough then there's a good handful of reliable blue chips paying dividends around the 7 to 10% mark.

Pointless spunking money on this kind of crap.

i only buy property for 100% cash, have done since the 80s.

dont trust any other method

I'm not sure this kind of scheme is about buying property?

Quickenthetempo wrote: ↑

Sun Dec 10, 2023 11:11 pm

House prices have risen for 2/3 months in a row now.

Not saying you should invest like, but with rents rising again. Landlords will want to snap up any property that comes on the market.

This s buying actual property rather than investing in a “scheme”