A website which could revolutionise how people buy property is set for launch at the end of the year.
HiP, a website, turns mortgages into so-called ‘HiP mortgages’ and transfers money into HiP tokens and shares or units of a property, with all transactions done via a blockchain. Users can view their properties in real time in a virtual 3D world and can sell off parts of the property and buy parts of another.
HiP will publicly trade with investors, first-time buyers and homeowners with equity to start with at the end of this year and the wider public next year.
There is a plan to develop an app in the future.
Kai Peeters, co-founder of HiP said: “It’s a system where people can have financial freedom in how they want their property to work for them. It’s the first to provide this level of service.
“HiP is the next generation of financial services. We fractionalise property and can mix between debt and equity.
“We’re launching it to create a bit more redistribution of capital in the world and more opportunities for those coming from lesser backgrounds and to create a more democratic process in buying property.
“We want to inspire a better quality of life. I’m trying something different, just exploring an idea. If you like it, use it and if you don’t, don’t.”
HiP claims it will be able to help first-time buyers get onto the property ladder by allowing them to purchase the part of a property they can afford, for example, buying and owning half of a house, while anyone, anywhere can invest in the rest of it.
And for older customers as an alternative to equity release, they will be able to release more shares of the house using HiP.
Buy-to-let landlords will be able to sell shares in one property to raise capital to renovate another property, for example, fixing a roof for a tenant.
As an alternative for remortgaging for renovations, people will be able view their house in HiP and change it how they want to, and then it will connect you with architects or designers who can make it happen.
Peeters added: “The idea of HiP isn’t to eliminate anyone. It’s just to provide a new offering and allow everyone else to be a contributor to its evolution.
“You can refer a property as an estate agent, be a conveyancer or solicitor and drive business from it because we need to validate all the prices of the buildings.”
HiP will also be able to be used as a high interest savings account, which according to Peeters, will consistently bring stable returns of around 4% or 5%.
Jordon Willis, corporate sales director at Crystal Private Finance, said: “I think it’s interesting. It’s something new and it will appeal to certain aspects of the market.
“My only opinions and views is it’ll appeal to the elderly with equity release, first-time buyers who maybe can’t afford a new property on low incomes and this could be the alternative to the government’s shared ownership schemes to help people get onto the property ladder.
“It’s quirky, it’s exciting and it’s something different.”
Peeters said the housing market system doesn’t work at the moment, with many people not being not being able to afford to purchase a house and people wanting to downsize having to move to areas they don’t want to.
He added: “There’s limited choice. Prices are compromising people’s quality of life because they’re just travelling.
“We value system that redistributes wealth and democratises property ownership by freeing up money and putting it back into the system.”