Minimum Investment
Criteria

MINIMUM INVESTMENT CRITERIA

  • Upon legal completion, all properties must be habitable, readily sale-able, structurally sound and be able to have buildings insurance arranged upon it.
  • Propnology is an equity-based crowdfunding platform; it does not provide loans for property development projects, or leverage finance against any of its offerings.
  • Propnology must be afforded exclusive marketing of each specific investment opportunity for the duration of the funding period (typically 30 days).
  • The platform is unable to cater for projects where a sourcing or agency premium is applied to the project costs. Such fees should be negotiated, with the vendor, away from the platform.

All crowdfunded properties must meet the following Minimum Investment Standards:

Property acceptability is based on a satisfactory valuation report from a RICS approved surveyor. Non-standard construction will be assessed on individual merit.

If leasehold, the property must have an unexpired term of more than 75 years at the point of listing.

Ground Rent

As a rule, the platform will not consider leasehold properties where the ground rent is considered disproportionate to the purchase price. As a guideline, properties valued below £250k, with a lease length in excess of 99 years, should have a maximum ground rent of £250 per annum.

It is essential that any debt or legal charges are discharged prior to legal completion.

All HMO's must have a valid HMO license.

Reservation Fees

It should be bourne in mind that the platform is unable to pay reservation fees to developers or their agents, for new build or off-plan properties, until the funding process has been completed.

Service Charges

As a rule, the platform will not consider leasehold properties where the service charge is considered disproportionate to the purchase price.

Ground Rent

As a rule, the platform will not consider leasehold properties where the ground rent is considered disproportionate to the purchase price. As a guideline, properties valued below £250k, with a lease length in excess of 99 years, should have a maximum ground rent of £250 per annum.

Payment Schedules

The platform is unable to consider properties that require more than 50% of the purchase price to be paid, to the developer, during the construction period. Funds required during the build stage will be released, by Propnology's legal representative, in accordance with the agreed, pre-defined, payment schedule.

Construction Status

Planning permission for the construction, renovation, refurbishment or alteration must have been secured and work must have already started before the property is listed for investment

Property must be subject to one of the following building control and monitoring requirements:

  • Building Standards Indemnity Scheme from an approved warranty provider
  • Professional consultant where small, solely residential development of no more than 15 units
  • An acceptable guarantee from a development corporation or local authority where they are the vendor

A final inspection is required to confirm completion of the new property unless covered by an acceptable new build warranty provider i.e. NHBC.

Definitions

A new build property is classed as any property being occupied and/or sold for the first time on the open market in its current state and includes converted and refurbished properties. These will fall into one of the following categories:

  • Newly built property.
  • Refurbished property i.e. refurbishment of an existing residential property
  • Newly converted property i.e. conversion of an existing non residential property
  • A property either new or converted (as above), that has been tenanted and is now offered for sale by the builder/developer

Properties must not subject to any overage or uplift clauses, or development covenants.

Overseas properties must be listed on the platform inclusive of all purchasing fees and local taxes.

Properties subject to Section 106 agreements must have provision included within the project cost.

Properties limiting occupation to a certain category of occupant - local residents, first time buyers, specified age requirement or specified employment types will not be considered unless they are purpose built and are specifically targeted investments under our alternative category.

Restricting use of property - tied to agricultural use, restricting residential occupation to certain time limits, for example, 10 months of the year, unless they are purpose built and are specifically targeted investments under our alternative category.

Properties must not be part of any government or shared ownership scheme.

If a property is subject to an existing tenancy agreement, the following conditions must apply;

  • The agreement must be recognised under UK law, i.e. an Assured Shorthold Tenancy (AST) agreement.
  • Any verbal agreements will need to be formalised, in writing. Statutory periodic agreements will need to be renewed under a formal agreement.
  • It can be demonstrated that the rent has been paid, in full, and on time for the last three consecutive months.
  • There must not be an Option to Purchase clauses within the agreement.
  • Deposits must be bonded by a Government approved Deposit Protection Scheme and ownership details transferred upon completion.
  • Agreements must not be subject to any service or contract agreements with third parties.

  • Freehold flats / maisonettes are not acceptable, unless freehold reversion / Tyneside arrangements and no more than four flats in building.
  • For leasehold property there must be a minimum of 75 years remaining on the lease at the time of listing. Shorter lease terms are only accepted on certain central London estates and subject to specific criteria.
  • Common hold property is not accepted.

The Propnology platform is suitable for all types of residential and commercial property.

However, due to their risk profile, the following property types would be considered unsuitable:

  • Hotel Investments
  • Plots of Land
  • Storage-based Investments
  • Airport Car Parking
  • Care Home Investments
  • Properties with restricted occupancy i.e Lodges/Park Homes
  • Houseboats and mobile homes
  • Leasehold Student Accommodation

  • Timber or metal framed buildings where the cavity, between frame & cladding, has been retrospectively filled with an insulation material
  • Concrete walls as built in Cornwall or Devon before 1950 (1960 for postcodes PL12, 13, 14, 15, 17, 18, 22 & 23) where valuer has recommended a Mundic report and test of the concrete has classified the concrete in either class B or C
  • Unrepaired, designated defective properties under the Housing Defect Act or not
  • Flats or maisonettes of large panel system type unless acceptable structural appraisal on the whole block
  • Load bearing panels of asbestos or gypsum plaster construction
  • Properties which are structurally unsound
  • Properties which are uninsurable.