A NEW peer-to-peer lender is set to launch, connecting investors with people looking to rent or buy property without a large deposit.
BunceCrowd’s investors will respond to ‘elevator pitches’ from potential borrowers seeking cash for their dream home.
The platform looks at rental values and property prices in the area in which the borrower wants to live, and pledges a certain amount of money if the borrower is approved.
Investors then buy the property as a cash buyer through a special purpose vehicle (SPV) limited company, and the borrower pays rent to the company each month.
Investors can expect to receive annual returns ranging between five and 10 per cent.
BunceCrowd’s founder is Murray Kerr, a former Royal Navy aircraft engineer with a background in the oil industry, who wanted to turn his interest in property into a business venture. He describes the concept as “like the PCP [personal contract purchase] of the car world but for rented property.”
“People are always thinking about what they are doing for investors but not what they are doing for borrowers,” he said. “Yes, investors are key, but I want to give something back to the borrowers as well.”
Investors also have the option to buy incremental shares in the properties on the platform, similar to the way shared ownership schemes work.
BunceCrowd acts as property manager, charging a fee for maintenance.
The platform hopes to launch under an umbrella company by April as it awaits regulatory approval within the next six to 12 months.
This article featured in the February edition of Peer2Peer Finance News, now available to read online.