Equity or P2P Property Investment – Which is Best?

There’s so much information out there on the currently hot topic of property crowdfunding platforms, yet with everyone touting their model as ‘the best’, the key differences between peer to peer (P2P) lending and equity crowdfunding may not be that obvious. As an investor or lender you need to make sure that you are aware of the risk and rewards involved in both types of crowdfunding.

So here are the pros and cons of each. Of course, each lending platform offers a different solution and terms, so please check carefully and seek independent advice before making any investment.

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Mortgage Tax Relief -The Dangers of Buying Property in Your Own Name

Owning via a Limited Company Has Never Made More Sense

Like most buy-to-let investors, most of my own buy-to-let properties were purchased in my name. Before the global crash it was easy to get finance as an individual but hard to get it as a company without giving personal guarantees. There were probably twenty lenders for personal borrowing for every one that would lend to a limited company. Few investors took the company route when buying.

Fast forward to 2015 and the Government has changed the rules on tax relief for personal buy-to-let properties when claiming mortgage interest. Actually, it’s confusing to call it a ‘relief’ – it isn’t; it’s a chargeable business cost. The ability to add this cost of borrowing to the rest of your business costs when operating as a landlord is now being phased out.

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Priestman Rd Loan Project Completed Today

Funded in One Day

Today one of our Borrowers, Lindsay Naylor, completed on a purchase of a 2 bed mid-terrace in Darlington, Co Durham using funds raised entirely by Crowdahouse® Members.

Lindsay had already entered into an option agreement to purchase the property, but decided to raise money via Crowdahouse to buy out the seller early. The loan was relatively small at £59,500 and was pledged within a few hours of the project going live and completed within a few short weeks during which the Borrower undertook standard purchaser’s conveyancing.

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How Do You Lend Money Via Crowdahouse?

The Crowdahouse Process – It’s Simple

At Crowdahouse, we try to explain our simple lending process as clearly as possible. We want you to fully understand both the risks as well as benefits of lending so that you can make an informed decision. If you’re new to peer-to-peer (P2P) lending and crowdfunding, sometimes it’s easier to just see the whole process in a diagram.

So here’s one we’ve created for you. From here, you can go to our Lenders section of the website and of course our FAQs for a more in-depth level of understanding.

And as always please contact us here if you have any questions at all.

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What Are The Different Types of Crowdfunding?

What is crowdfunding?

Crowdfunding is a means of raising money to fund a business or project by using small amounts of money from many individuals (the crowd) rather than large amounts from just a few investors, as was the traditional way.

In my last post How Safe is Peer-to-Peer Lending?, I mentioned that there are different types of crowdfunding. These are often not clearly explained by the media because crowdfunding is a new and fast moving industry, and a result this can lead to some confusion among the public.

The 4 Types of Crowdfunding

There are 4 main types of crowdfunding.

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How safe is peer-to-peer lending?

Is P2P Lending Really Safe?

Since we started crowdfunding in 2012 Crowdahouse have always been on the lookout for media coverage of crowdfunding. The industry has grown exponentially over the last few years and now practically everyone has heard of crowdfunding, whether or not they fully understand it. It’s hard not to have heard of it, as we’re constantly bombarded with multiple TV ads, print ads, giant billboards on London Underground platforms and yet more advertising on tube trains. And that’s not including online coverage.

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Latest Project: Pullman House

10% p.a. for 9 Months Term Fully Secured

Crowdahouse has just relaunched with an exciting business-to-business (B2B) loan project in which the Borrower, an experienced property investor, is looking to raise £500,000 to refinance his freehold block of flats in Darlington, County Durham.

The loan term will be for 9 months and pays 10% per annum interest, fully secured with a first charge over the property. Lenders pay no fees. This is an excellent opportunity for Lenders to try a short term loan with high interest return.

To find out more details about this opportunity, please visit our Make A Loan page.

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Crowdahouse Relaunches

Crowdahouse Relaunches with Secured Lending Model

Our story

Back in 2012 Crowdahouse created the world’s first crowdfunded property fund – the Crowdahouse Pioneer Fund. This was a truly innovative product allowing anyone to join a crowd and own investment property together.

The only problem was that in 2012, despite confirmation from our compliance advisors, the Financial Services Authority (FSA) wouldn’t tell us whether our crowdfunding model was acceptable to them.

For us, this was a serious issue. My co-founder also ran an FSA-authorised firm and we decided the risk of going to market with our Crowdahouse Pioneer Fund was unacceptable. We wanted to protect our Members’ interests as investors, which would have been impossible.

In September 2012, a Sunday Times feature brought us to the attention of a major international investment bank and so, because of the risks of crowdfunding, we continued working with private investors on our own property projects.

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Contact Crowdahouse here