MORE THAN three million (3.4m) savers and retail investors are considering property investment platforms for the first time, but they have yet to find one that they like and trust.
According to new research from secured property lender Fitzrovia Finance, retail investors are becoming increasingly open to using property-based investment platforms, with one in 10 planning to invest more through these platforms after the FCA’s new regulations come into force on 9 December.
“Our research shows there is a significant number of individual investors who are looking for the right property investment platform to use,” said Brad Bauman, chief executive of Fitzrovia Finance.
“This is driven by attractive risk-adjusted returns in a low interest rate environment, and a desire for investors to diversify their investment portfolios.
“This will only be enhanced by the welcomed new regulations coming into force later this year that make the sector more transparent and safer. This should intensify the spotlight on sites such as ours that offer lower risk property investment opportunities at attractive returns.
“However, property investment sites should not wait for the introduction of the new rules, they should be striving to make sure they are promoting the right investment opportunities at the right levels of returns and that the risks involved are clearly explained to potential investors.”
Fitzrovia’s research found that 27 per cent of retail investors have been dissuaded from investing on property platforms as a result of negative coverage of the sector.
However, there are signs that investors are becoming increasingly comfortable with property investment platforms.
Among those who already use property investment platforms, 95 per cent said that they would be willing to increase the amount that they currently invest through them. The main reasons for this include a wish to diversify their portfolios, the introduction of new regulations which will make the sector more transparent and safe, and property becoming a more attractive asset class.