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Peer2Peer Finance News | August 18, 2019

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The House Crowd hits £50m via mix of P2P and crowdfunding

The House Crowd hits £50m via mix of P2P and crowdfunding
Anna Brunetti

THE HOUSE CROWD has hit the £50m funding target it set out to achieve in October last year.

The Manchester-based property platform started targeting institutional money at the end of last year to achieve its first £50m of funds channelled to property and buy-to-let borrowers, through both its peer-to-peer side and its crowdfunding arm.

The firm raised over £15m in the six months to early 2017, while a loan it closed last month added another £600,000. The loan was funding a project in St Thomas Road, in the Greater Manchester area, offering investors eight per cent returns on a 63.2 per cent loan-to-coverage ratio, over a six-month period.

Since its launch in 2012, the platform has returned £11m of interest to investors, attracted 15,000 online users, opened a new London office in Canary Wharf and boosted its staff from three to 24 employees.

The firm’s chief executive Frazer Fearnhead (pictured) said the current economic, funding and regulatory backdrop is strengthening the case for alternative finance options and boosting business for lending platforms.

Read more: The House Crowd hires chief technology officer to lead digital innovation

“Today investors are facing uncertainty on an unprecedented scale,” Fearnhead said.

“Traditional buy-to-let is now unviable for most individuals, interest rates are woefully low and look to stay low for considerable time. Also, the stock market is a gamble few can afford to take.

“No wonder people are turning to property crowdfunding to take control of their own finances, spreading their risk across a diverse range of investment products.”

Property-backed P2P loans typically provide fixed returns of between eight and 12 per cent in less than a year, Fearnhead pointed out.

“I have no doubt the confidence we’re seeing from investors in our service will continue to grow, as alternative finance takes the place of less attractive, traditional investment options.”

The House Crowd was launched in 2012 as the world’s first property-focused crowdfunding platform, but has recently stepped up its P2P lending operations to offer a separate investment product.

Read more: P2P platforms predicted to shift to hybrid models