Peter Read, managing director of Assetz Exchange, and Stuart Law (pictured), chief executive of Assetz Capital and chairman of Assetz Exchange, introduce a new concept for buy-to-let property investment
“Many people think that the buy-to-let market is finished following all the recent tax changes”, says Stuart Law, chief executive of Assetz Capital. “But it’s just evolving.”
Law is referring to the peer-to-peer lending platform’s sister company Assetz Exchange, which is breathing new life into buy-to-let investing with purpose.
Like Assetz Capital, Assetz Exchange is a regulated P2P platform which specialises in property-backed lending. However, there are several differences.
On the borrower side, while Assetz Capital lends to third party developers and companies, Assetz Exchange leaves control of properties directly with the investors.
Law describes Assetz Exchange as being like a stock exchange for property, where people can buy and sell an interest in a property at a premium or discount as property prices fall or rise, without the usual property transaction costs. But the platform’s primary objective is to offer longer-term, inflating income for investors, while fulfilling a great social need.
“Our investors benefit from capital gains and losses as well as inflation-beating income, and they can choose to reinvest the income each year, the same as the stock market investor would reinvest dividends and get better returns in the long term,” explains Law.
“At the most simple level, our aim is to enable investors to be able to put together a diversified property portfolio easily and cheaply,” says Peter Read, managing director of Assetz Exchange.
Listed properties often enjoy long-term rental income since they are social or supported living homes rented to charities or other organisations on longer-term leases, and often with local or central government income covering the rents. With other properties, it’s the government-supported serviced plot and custom build housing sector funding the supply of building plots for custom designed eco-homes.
This would make Assetz Exchange a prime candidate for ESG investors, but Law says that there is more to it than that.
“It’s fashionable to use that label nowadays, but this is much deeper than a label and goes to the heart of what Assetz is all about,” he says.
“Over the last two decades the group’s investors have delivered £2bn plus of funding into undersupplied residential property markets, providing much needed housing. We’re addressing huge holes in the market and we’re doing it because our investors love a great investment that also addresses a market need.”
In this way, Assetz Exchange represents the buy-to-let investment of the future. Whereas traditional buy-to-let investors have been squeezed by regulations and taxation over the past few years, Assetz Exchange allows anyone to invest in rental properties, without the hassle or taxes of owning whole properties. The platform also has its own Innovative Finance ISA (IFISA), which means that each investment can be more tax efficient.
“Buy to let has had a good run over the last few decades, and delivered huge amounts of new housing stock,” adds Law. “But taxes are growing on that and it’s time to move on to address more current housing challenges and also see higher yields.
“We fully expect to see people moving over to Assetz Exchange, because while buy to let may be dead, long live buy to let in its new, more purposeful form.”