Property platform investors have over 30% invested in such sites
Individual investors in online property platforms have an average of £39,178 invested through them – making up around 30.2% of their entire savings and investment portfolios, research from property lender Fitzrovia Finance revealed.
New regulations are being introduced by the FCA which will restrict individual investors new to the property investment platform sector to investing a maximum of 10% of their investable net assets through these platforms.
It appears that most are taking this risk as they expect high returns from their investments. Over two thirds (69%) expect a return of over 5%, about one third (35%) want a return of between 6% and 7%, and one in five (21%) expect a better than 7% return on their investments.
Brad Bauman, CEO, Fitzrovia Finance, said: “The new guidance from the FCA has been implemented to discourage individual investors from being overexposed to property investment platforms.
“For sophisticated investors, the opportunities available through our and other secured property debt platforms provide a great choice to diversify their portfolios and improve returns on their investments in a low-interest environment and given a volatile stock market.
“However, we recommend that investments should be spread across a number of platforms and they should only make up part of your overall portfolio – certainly no more than 10%.”
Fitzrovia Finance commissioned research with 311 retail investors who have used property investment platforms and found that 70% have more than £20,000 invested through them, with 31% having more than £50,000.
Surprisingly, 76% claim that they have more than 10% of their savings and investments invested through property investment platforms. Only 8% said that they had less than 5% invested through these sites.