Small investors offered Prime London market

Kasmira Jefford
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A PROPERTY crowdfunding start-up that aims to make prime UK property accessible to retail investors has launched a £1m offer today for a luxury flat in south west London.

Property Crowd’s chief executive Scott Trapnell co-founded the company with a private investor in 2013 after first coming up with the idea while studying for an MBA a decade ago.

“We wanted to use that buying power from Crowdfunding to allow people to become property owners at a lower entry point and without the headache,” he told City A.M.

It is raising £1m to buy a two-bedroom apartment in Hurlingham Walk, a residential scheme being built in Fulham by Berkeley Group’s luxury development arm St James.

Under the terms of the offer, investors have to spend at least £5,000 and pitch in for a minimum of five years. In return, they receive 100 per cent of the net rental income and 75 per cent of the capital appreciation upon a sale of the flat in around five to six years time.

It is the second fundraising round launched by the company after closing its first £1m offer at the end of last year for an upmarket student housing development in Southampton.

Property Crowd is one of several companies using crowdfunding as alternative means of tapping into the UK real estate sector, including Property Partner, The House Crowd, Property Moose and Property Seed.

The company, which is regulated by the FCA, aims to launch around five to 10 offers a year across high quality residential, student and commercial property in the UK and overseas.

Trapnell said the firm already has pledges to cover 20 per cent of the offer from existing investors and expects to attract more interest ahead of pension freedom day on 6 April, when savers are handed greater powers to access their retirement pots.

Property Crowd is separately understood to be in talks with a US venture capital interested in buying a stake in the firm to help fund its expansion.