We recently reached out to Propnology,  one of the first  UK Crowdfunding providers for Property to receive full authorisation from the Financial Conduct Authority (FCA). We conducted a short interview to get some good insights for our viewers information. We have not added Propnology to the Haven Investor portfolio just yet as they are so new – we will however be monitoring them closely & when we are satisfied, its a good opportunity for Investors, we will bring them in as a partner. In the meantime, take a look at their response to 5 key questions we asked.

1) What is Propnology all about, background and when did you start? 

We are an online property crowdfunding platform which opens the doors to providing investors with a modern online investment experience. Individuals can invest, from as little as £500, into a range of residential and commercial property investment opportunities, across the UK.

In 2014, we looked at the equity crowdfunding model and explored its adaptation as a mechanism to fund property investment opportunities, rather than as a vehicle to raise money, for new businesses. At the time, there were companies already trying to adapt the concept, without actually providing a fully automated platform, or, alternatively, exploiting existing loopholes to avoid financial regulation. We adopted best practice, from the outset, in this relatively new field, by working to ensure our model was fully compliant with the FCA’s regulatory requirements.

2) What are the main advantages of your platform compared to others for investors?

Our approach has been different to that of our competitors, choosing to steer away from self-sourcing or renovating properties within limited geographical areas and instead focus on building a network of professional partnerships who introduce attractive property investment opportunities to the platform. We believe this will provide a wider choice of investment opportunities for our investors.

We still ensure that each prospective opportunity is subject to a systematic and rigorous internal due diligence process, but our model enables us to cover both residential and commercial property classes across the whole of the UK.

We have taken a different approach to our competitors by choosing to steer away from self-sourcing or renovating properties, within limited geographical areas

In addition, a tiered recognition program, has been introduced, based on the number of successfully funded properties a partner has introduced, to increase trust with our investors.

3) What are the main advantages of your platform compared to others for Partners?

Primarily, it provides an innovative marketing and sales channel for a range of potential partners, including developers, marketing agents, sourcing companies or estate agents.

We do not charge any fees and property offered to investors, via the platform, is funded quickly – typically within 30-days.  Once funded, Propnology acts as the single contact point, thus simplifying the whole process.

4) What annualised returns can investors expect to receive? And what is the maximum LTV on each secured property transaction?

Our model is purely equity based, and we therefore do not leverage any debt against the property as we believe this to be a risky short-term business strategy. We look for average annualised yields of 10%, and net dividend yields of around 5%. However, each opportunity is individually assessed and the returns will vary. In all cases, we aim to achieve a balance between income and capital growth.

To ensure the opportunity provides genuine value to the investor and achieves the right balance between capital growth and income, we aim to target property, at below market value, with a strong yield potential. We also defer our administration fees – equivalent to 10% of the net profit generated upon disposal – in lieu of monthly or annual company administration charges. This ensures that a strong yield is maintained and the level of dividend income, paid to investors, is maximised throughout the investment term.

5) Where do you see Propnology in 3 years from now?

Ideally, we would hope that, Propnology would have achieved the success that would make it the platform of choice, for property investment in the UK.