An online property investment platform has launched called Propio – which claims to offer returns of up to 20%.
Investors can use the platform and allocate money either to specific projects or to a selection of pooled bonds which invest in multiple opportunities.
They must invest a minimum of £1,000.
Parul Scampion, co-founder at Propio, said: “Our ambition is to democratise property investment, demystifying the development process so that retail investors of all backgrounds can access the sorts of returns previously only available to the financial elite.
“Of course, development is more risky than keeping cash under the bed, but with returns up to 20%, there is potential to tap into far greater returns than many other platforms offer.
“Our fintech platform opens up exciting new avenues of funding for developers keen to share equity with others or whose schemes may not be big enough to excite the major banks who have been told to reign in lending.
“With the bombshell of tax hikes buy-to-let investors now face, we’re hoping to offer far better returns with a greater level of transparency on the fees charged.
“We are also planning on launching an ISA product in the autumn which makes it even more tax efficient as there would be no tax to pay whatsoever on any returns. Best of all the earnings can be recycled and reinvested.”
Investors get a return when loans are repaid, or developments are sold, with the duration depending on the type of project and on whether investors have taken a debt or equity stake.
Taking an equity stake in a project – the highest risk option – could potentially earn a return of up to 15-20% per year. However, equity holders are always the last to be repaid, which is why returns are highest.
Debt investments – where money is lent to developers but secured against the asset – typically return around 8%.
Propio focuses on developments that have already obtained planning permission so delays are less likely and returns are more predictable.
Propio secures exclusive property investment opportunities through a network of investment and property contacts.