Propnology is directly authorised and regulated by the Financial Conduct Authority (FCA) under firm reference 650066 to operate as a Property Crowdfunding platform.
Yes, however, investors not resident in the U.K must first satisfy themselves that they are not subject to any local requirements that prohibit or restrict them from doing so. Payments to Propnology must be made in £GBP, and may be subject to additional bank or card charges. To reduce currency conversion costs, investors may wish to use a foreign exchange broker or service.
The minimum investment is £500 per investment, although certain offerings may have a higher minimum investment threshold. There is no maximum investment limit.
A broad range of crowdfunded property investment opportunities are listed, across residential and commercial property classes, with an extended geographical reach throughout the U.K. Residential investments include individual apartments, houses, apartment blocks and portfolios. Commercial offerings comprise of industrial, office, retail and leisure investment opportunities.
In addition, Propnology Prime offers the opportunity to invest in prime and super-prime properties, located in some of the best locations and flagship buildings throughout the UK.
Propnology have taken a different approach to its competitors, choosing to steer away from self-sourcing or renovating properties within limited geographical areas, by building a network of professional partnerships to introduce attractive property investment opportunities to the platform.
Suitable properties are introduced, to the platform, by property professionals and companies including estate agents, marketing and sourcing companies, property developers, fund and asset managers.
The Investment Process
Each crowdfunded investment offering provides accurate and factual information to enable the investor to make an informed investment decision. This input includes prominent descriptions of potential benefits, risks, management structure and exit strategies. Investors may also share knowledge by posting public questions about the offering.
When an investment is made, funds are held in escrow until the funding target has been reached, whereafter they are transferred to a solicitor to complete the legal formalities.
Upon completion, investors are issued shares within the Special Purpose Vehicle (SPV), which owns the property, in direct proportion to their level of financial investment.
Participating investors will have access to a personal dashboard to monitor and track their investments.
At the end of the investment term, the property will be sold, assuming it has exceeding the original project cost; shareholders will be paid back the original amount invested, together with a share in the capital growth, in direct proportion to their level of investment. In the event the property is valued at less than the original project cost, investors will decide, via a simple ballot, whether to retain the property or sell at the present value.
A Special Purpose Vehicle (SPV) is a UK-incorporated Limited Company and is formed for the sole purpose of holding the underlying crowdfunded property asset.
Propnology's fees are applied in two ways;
- A platform-based crowdfunding fee of 5% is payable, based on the overall project cost, and deducted once the legal process has been completed. This fee also covers the costs associated with payment processing, escrow services and anti-money laundering checks.
- An annual SPV management fee, equivalent to 0.5% of the overall project cost, to monitor and administer the investment on behalf of the investors. This fee is billed on a quarterly basis, in line with investor dividend distribution.
Mastercard and Visa debit or credit cards are accepted. The name on your card statement will be Propnology.
Our platform also supports bank transfers. During the transaction process, bank details specific to each investment, will be provided. Consequently, investors may make arrangements to transfer funds, using either internet banking, telephone banking or by visiting their local branch.
The costs associated with payment processing, escrow services and anti-money laundering checks are included within the platform-based crowdfunding fee.
The Direct Marketing Directive (DMD) cancellation rights only apply to services provided to consumers. Participants who invest money on the Propnology platform, do so in the course of business; when an investor signs the share offer form, and completes the payment process, the contract is deemed to have been performed and cancellation rights no longer apply.
Initially, an extension to the funding period of a further 7 days will be applied providing 75% of the funding target has been raised, by the original closing date. Funds will otherwise be returned to investors, in full, via the original payment method used.
When an investment is made, funds are held in escrow until the funding target has been reached, whereafter they are transferred to a solicitor to complete the legal formalities. Escrow services are provided by Mangopay, the platform's payment service provider.
During the property purchase process, a bespoke Articles of Association will be adopted by participating investors. Shareholders will initially pre-select Propnology Asset Management (P.A.M), as the SPV administrator, to execute activities on their behalf. Delegated activities may include, the appointment of a letting agent to find a tenant, the collection of rent and the maintaince of the property. Shareholders will nevertheless still maintain day-to-day control of key, strategic and operational decisions.
An annual SPV management fee, equivalent to 0.5% of the overall project cost, is charged to monitor and administer the investment on behalf of the investors. This fee is billed on a quarterly basis, in line with investor dividend distribution.
For our investor's convenience, we provide 24/7 access to a personalised online dashboard. Relevant information such as annual bank statements, dividend vouchers, annual accounts and expenditure invoices will be provided on an ongoing basis. Furthermore, message alerts will be received when new documents are added.
It is possible, through Propnology's Share Marketplace, to facilitate the process of finding a buyer for the resale of shares prior to the end of the investment term. In practice, the shares are relisted and marketed, in the same way as a new crowdfunded investment offering is presented. However, the Share Marketplace should not be considered as a trading facility, where investors relist shares and choose their own price; this is to ensure that relisted shares do not misrepresent the market value of the underlying asset, at any given time. It should be borne in mind, that while the facility provides a potential opportunity for an early exit, there is no guarantee that a buyer will be successfully found.
If the transaction value is £1000 or above, the buyer will be subject to Stamp Duty Reserve Tax (SDRT) of 0.5%. This cost will be included within the overall listing cost, for example:
Share Price £1000.00
SDRT (0.5%) £ 5.00
*Note: Propnology will deduct 5% as a platform administration fee from the proceeds. The balance is electronically transferred to the seller.
No debt is leveraged against the property as this is considered to be a risky short-term business strategy. The property remains debt-free until it is sold at the end of the investment term.
Propnology acts independently of the SPV's. Investors retain the legal share of the SPV and the crowdfunded property asset held within it.
In the case of property investments, the difference between the projected gross and net yields can be quite significant; they may be defined as follows:
This is the yield on an investment before the deduction of taxes and operating expenses, expressed in percentage terms. It is calculated by dividing the annual rental income (before taxes and operating expenses are deducted) by the total project cost.
This is the yield on an investment after the deduction of taxes and operating expenses. It takes into account all the fees and expenses associated with the property. As such, it is a far more accurate illustration of the asset's financial performance.
Annual Yield combines the net yield figures with the projected capital growth, over the term of the investment, minus disposal costs; it provides a representation of the asset's performance throughout the investment period.
Investors will be paid dividends on a quarterly basis.
The SPV is a private UK Limited Company; consequently, corporation tax is payable on any profits generated by the company. Tax is deducted, before funds are distributed to the shareholders, although relief is available for expenditure such as management and professional fees.
Shareholders will need to declare dividend payments on their personal tax return and those seeking tax advice should consider requesting professional advice from an accountant.
Propnology Asset Management (P.A.M) will obtain three market appraisals, or a formal Royal Institute of Charterered Surveyors (RICS) valuation, on behalf of the investors.
If the property is valued in excess of the original project cost, it will be sold and 100% of the net profits will be distributed to the shareholders.
Where the property value is less than the original project costs, shareholders will cast a vote on whether to sell, or retain the property, until market conditions improve. Any decision will require a simple majority vote; if a decision is reached to retain the property, Propnology will look to secure a new 12-month tenancy so as to preserve the level of income generated.
As Propnology is an online business, contact may be made at any time that is convenient, although do note that this does not imply that a response will be made on an immediate basis outside of normal office working hours. Contact options include:
Online Chat: Available during office hours (9am - 6pm, Monday to Friday)
VOIP Call: Using Skype or Webex (Email for details)
Post: Propnology, North Colchester Business Centre, 340 The Crescent, Colchester CO4 9AD
In Person: Office appointments are available, but should be arranged in advance.
Yes. If you are acting on behalf of a company, fund, trust or single family office, looking to invest on the platform, please contact the investment team at firstname.lastname@example.org
To promote investor confidence and trust, Propnology operate a tiered recognition program based upon the number of successfully crowdfunded properties a partner has introduced to the platform. The partner's tier level is detailed within the partner profile section of the investment listing.
Silver partners have introduced one successfully crowdfunded property to the platform.
Gold Partner status reflects a loyalty and continued commitment to Propnology and its investors. Gold partners have introduced five successfully crowdfunded properties, or property in excess of £1million, to the platform.
Platinum Partners frequently use the platform as a sales and marketing channel for their businesses. To qualify, Platinum partners must have introduced twenty five successfully crowdfunded properties, or property in excess of £5million, to the platform,
Diamond Partner status represents the highest level of recognition and trust. Diamond partners must have introduced fifty successfully crowdfunded properties, or property in excess of £10million, to the platform.
Clients may report complaints the following way;
Clients must provide;
1.) Full Name
2.) Nature of the complaint
To resolve the complaint, Propnology will;
- Log issue on our Customer Management System
- Advise what will happen next
- Treat the complaint fairly
- Aim to resolve the complaint within 5 working days
- Provide regular updates until the complaint has been resolved
Once Propnology has dealt with the issue, the company will review the complaint internally, to see what lessons can be learnt.
Clients who are unhappy with the response provided, will be requested to provide further information for consideration. Any client may also contact the Financial Ombudsman Service (FOS), to carry out an independent review of the complaint.