Online property investment platform Propio.com has moved to further ‘democratise’ the market by reducing its minimum investment to £250 from £1,000 as it looks to attract “Generation Rent”.
The website, which launched at the end of June, is also planning to add a few more retail-friendly options to its offering, including the ability to invest via an individual savings account (ISA).
Tom Buttress, Propio’s co-founder and managing director, told Proactive Investor that the ISA option project is underway, and said it should be available by the year-end.
Buttress – a former management consultant who has bought his technology expertise to bear on the Propio platform – pointed out that since launch, the platform has attracted 1,000 people to its community, pulling in investments so far of £6.5mln.
He pointed out that the site has completed 11 deals to date and is starting to pay-back investors on time, and in some cases ahead of schedule.
The co-founder said the portfolio is tracking a yield of around 8%, with the earliest pay-back at 6.5%.
The straight-forward Propio platform allows users to log in and allocate money either to specific projects or to a selection of pooled bonds which invest in multiple opportunities.
The website includes in-depth information about the opportunities and an explanation of the project’s timeline.
Propio secures exclusive property investment opportunities, which meet its strict investment criteria, through an extensive network of investment and property contacts.
The company uses the latest industry research to seek out attractive property opportunities throughout the UK.
Investors get their cash back 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.
Spread of opportunities
Buttress pointed out that on its launch, the platform only had one opportunity but now there is a spread of opportunities across a wide variety of geographies around the UK, meaning investors can choose different risk levels.
He noted that investors are understandably nervous around the high-flying London property market, so having investment developments in areas around the country from Cornwall to Cardiff to Liverpool makes sense.
Propio’s co-founder said that although the platform is aimed at all types of investors, from high net wealth individuals downwards, it really offers an opportunity for younger investors – ‘Generation Rent’ – who are currently locked-out of the property market due to high prices.
READ: New online platform, Propio looking to “democratise property investment” with returns of up to 20%
Buttress sees an investment on the site as providing “a virtuous circle” for younger investors, providing them with a fund which can help them to work towards a deposit to buy their own home whilst building more homes in the UK.
He noted that the platform has been successful at attracting young professional investors in the 25-35 age range since its launch, who might not have a lot to invest at first.
Thus, he believes, the reduction in Propio’s minimum investment will open up the market massively and help the younger generation to chip away at the property market.