The House Crowd is a UK peer to peer and property crowdfunding company that helps connect borrowers with lenders. The House Crowd is an award-winning company that has helped UK individual investors invest more than £120 million. The company offers peer-to-peer lending products, property development investments, individual savings account (ISA), and auto invest. In this article, we will look at how to invest in The House Crowd.
Quick Facts About The House Crowd
- Started in 2012 by Frazer Fearnhead and Suhail Nawaz.
- The company’s customers have invested more than £120 million.
- The House Crowd has more than 27k investors.
- The House Crowd has paid out more than £57 million to investors.
- Average annual return in The House Crowd is 10%
- The minimum you can invest is £1,000.
Why The House Crowd Was Started
The House Crowd was created with the goal of connecting borrowers and lenders. The company allows the two sides to meet in a safe environment. As a peer-to-peer marketplace, borrowers benefit by having access to funds that they need. Individual investors on the other hand get a return of investment of their funds. This process creates a mutually-beneficial situation for both sides.
The company was started in 2012, a few years after the global financial crisis. The crisis led to a significant change in the financial system. The Bank of England, as with other central banks in the developed world, brought interest rates to zero. Regulators also placed many regulations in the banking sector. The most common regulations in Europe were Basel 1 and Basel 2. The impact of these regulations is that they made it difficult for banks to lend money.
As a result, many developers turned to alternative lending places such as peer-to-peer marketplaces. The House Crowd prides itself for having a marketplace where loans are backed by property.
How The House Crowd Works
As mentioned above, The House Crowd has four products. The Peer-to-Peer lending product allows you to lend money to borrowers through the platform. This is a product that is similar to Lending Club, with the only difference being that the loans are backed by property or land. Below is how a typical peer-to-peer loan looks like.
The Property Development Investment is a product that allows you to invest in a project that is managed by The Housing Crowd. Here, you are giving the company funds to invest in property. The loan is backed by the property. You will make money once the company completes the development and sells the property. Below is how a typical property development works.
The Individual Savings Account (ISA) is a product where you invest and the company allocates money in a diverse portfolio. This portfolio includes peer-to-peer loans, property development funds, and mezzanine finance loans. This product works just like Betterment and WealthFront investments. The minimum amount you can invest is 3,000 pounds and the minimum duration is 3 years.
How to Invest in The House Crowd
The process of investing in The House Crowd is relatively easy. First, you visit the website and click the register button. It is important that you read the terms and conditions that are available on this page. You must be over 18 years to invest in The House Crowd. After you register, you will need to verify your details.
Second, you need to deposit money to your account. The minimum amount you can invest in The House Crowd is 1,000 pounds. You can deposit the funds using your cards or by doing a bank transfer.
Third, you need to look at the investment products that we have mentioned above. You can select the auto invest product. Here, you need to enter certain parameters such as your risk profile and then invest. If you decide to invest in peer-to-peer, look at the investment products that are available and allocate your capital.
Why Invest in The House Crowd?
There are several benefits that you get by investing in The House Crowd. These are:
- Multiple services. Unlike other niche investment companies, The House Crowd has multiple products that you can invest in.
- Good track record. The House Crowd has never lost money for its investors. While past performance is not an indicator of future performance, it can tell you a lot.
- Diversify your income. The House Crowd enables you to diversify your sources of income.
- Fast growing. The House Crowd is one of the fastest growing companies in the United Kingdom.
- Better returns. A typical investment in The House Crowd makes more than 10% every year. This is better than what other investments return.
- Easy to invest. The process of investing in The House Crowd is relatively easy.
What are the Risks of Investing in The House Crowd?
We get this question a lot. Investors want to know the risks that are found when you invest in loans online. Here are some of them.
- Insolvency risk. This is when a company goes out of business.
- Default risks. There is a risk that a borrower will default on his obligations.
- Security risks. The House Crowd has invested in quality security features. However, this does not mean that the company is immune from security risks.
- Liquidity risks. It is difficult to exit some investments that are made in The House Crowd.
- Regulatory risks. There are risks that the peer-to-peer lending industry could be regulated.
What are the Alternatives to The House Crowd?
There are hundreds of peer-to-peer lending companies in Europe. Some of the most popular are:
The House Crowd is one of the fastest growing fintech companies in the UK. The company has continued to win awards and grow its users. As an investor, it makes a lot of sense to diversify your income by investing in The House Crowd. Still, you need to remember a few things. First, only invest a small portion of your funds in the company. Second, diversify your income by having other investments. Finally, invest across the company’s products.
Crispus is a finance professional with more than a decade experience in the industry. Over the years, Crispus has written in-depth articles on leading platforms like CCN, Marketwatch, and Seeking Alpha. He also runs a Forex education and managed account company called WestEndFx.