DOWNING has hired two real estate experts from Funding Circle’s property division as it enters the property development space through its crowd bonds platform.
Investors on Downing’s crowd bonds platform are being offered returns of five per cent for one year or six per cent for two years by investing in Downing Development Finance (DDF) through the DDF Property Bond.
As part of the launch, Downing has brought together a team of specialist property investors, including Hannah Kenny and Parik Chandra who previously worked together in the real estate finance division for Funding Circle.
Downing will apply its own due diligence process to select a number of loans from Funding Circle’s own closed property loan book for the DDF portfolio.
The proceeds of the bond will be used to fund a range of residential property developments and support small business owners who want to develop their premises, such as pubs and care homes.
The bond can also be held in the platform’s Innovative Finance ISA.
“We believe the new DDF Property Bond can offer investors something really unique in the popular world of property investing,” Julia Groves, Downing partner and head of crowdfunding, said.
“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.”
“We believe we are launching the new bond at an interesting time in the broader property market – with increasing restrictions on buy-to-let, some property investors are looking elsewhere for the competitive, risk-adjusted returns offered by the DDF Property Bond.
“The bond can also help address the lack of financing for small-to-medium sized property developers, which is a contributing factor to the ongoing housing shortage in the UK.”