Frequently-Asked Questions

About The House Crowd

The House Crowd have been operating since March 2012.

Our past performance data is produced monthly and stored for our members to view in the ‘Blog’ section of the website.

On peer to peer loans, returns quoted are net of any fees. The House Crowd charges the borrower rather than the lender. Fees on equity investments are usually based on a percentage of them money raised which constitutes the platform fee, and are charged to the SPV. These fees are usually around 5%. Specific information on all fees charges is clearly detailed in the information pack for each investment

Should you have a complaint you may report it by:

  • Email: [email protected]
  • Telephone: 0161 667 4269
  • You must state your full name and the nature of the complaint. The House Crowd will:
    1. Log the complaint
    2. Treat the complaint fairly and advise on the next steps
    3. Aim to resolve the complaint within 5 working days
    4. Provide regular updates until the complaint has been resolved
    5. Use any complaints to review the area of business to which it relates

    Investors may also contact the Financial Ombudsman Service (FOS), to carry out an independent review of the complaint.

    You may like to take a look at our dedicated YouTube channel in order to learn more about us – there are numerous videos explaining how we work and also videos of answers to some of our most frequently asked questions – we update this channel all the time so please keep going back to it.

    click here to go to The House Crowd's YouTube channel.

In respect of debt investments (Secured Peer to Peer Lending, Property Development Investing and Auto-Invest), your money would continue to be protected by the legal charge. With regards to our equity investments (Property Crowdfunding), The House Crowd acts independently of the SPVs and is simply a listing platform. Investors remain legal shareholders of the SPV and the property.

We have a living will agreement in place with another FCA regulated company. In the unlikely event of insolvency, they will take over the business and implement contigency plans in place to manage the situation and returns investors' money to them ASAP.


Creating Your Account

No, not at all. Joining us is free and without any obligation. Once you have created your account (by completing steps 1 and 2 of our registration process) you can view more detailed information about our investments, plus you will receive a free investment guide.

Our ID verification checks can take up to 24 hours. Once you have created your account you will be asked to upload a photo of your ID. You can do this straight away (we'd advise doing this so you're not delayed when you choose to invest), but you can upload it another time if you don't have details to hand.

To make our ID checks as quick as possible, please ensure you provide photographs of the documents requested and that they are clear and legible.

Yes. You will need to create their account and provide their ID in the same way as a personal account.


Before Investing

Yes. Providing you are over 18, agree to our terms, risk warning and to receive communications. You will also have to verify your ID and email address before investing.

The minimum investment level is £1,000.

In respect of debt investments (secured peer to peer lending, property development investing, Auto-Invest and our Innovative Finance ISA), once the loan is made your money is protected by way of a legal charge (registered at the land registry) over the property. Whilst with the solicitor your money is protected by the Financial Services Compensation Scheme (up to £75,000).

In respect of equity investments (property crowdfunding), once the property is purchased, you have a legal share in the SPV that owns the property and your rights are protected by the company’s articles.

There have been zero capital losses for our members on any of our peer-to-peer loans, development loans or assured rental products. A few years ago we undertook a speculative off-plan investment in Sutton, Greater London. That was highlighted as being very high risk and dependent on house prices rising during the development of the building. Unfortunately, that did not work out and investors did lose some of their capital invested. Investments based on achieving capital growth are always speculative and we no longer offer such investments. Our policy is to focus on investments that produce predictable income returns.

No. A product marked as 100% funded, is no longer available for investment.

You will be able to see a record of the investment(s) made on the dashboard within your account. You will also receive an acknowledgement email.

Yes. You can invest via a SSAS if your pension provider allows non-standard assets to be held within it. Please contact us for information of this is of interest.

Yes, you can. Just ensure you state you are investing through a company when asked in the second step of our registration process. Please note If you also wish to invest individually you will need to set up a separate account with us under a different email address.

Yes, we do accept investment from residents of many overseas countries. Please check that the country you reside in allows investments of this nature. In addition to photo ID, we would need proof of address identification (you’ll also need to check your country allows investments of this nature in the UK).

We accept investors who are resident in the EU, Switzerland, Canada, Australia, New Zealand, South Africa, United Arab Emirates, Hong Kong among others. Please note for legal reasons we cannot accept investment from residents of the United States of America.

We have a growing number of Muslim investors investing through The House Crowd and we have been told that Buy to Let investments, those that do not offer a fixed interest rate, are a Sharia compliant investment opportunity.


Payments

You can make payment for your investment either by debit card or bank transfer. We do not accept credit card payments.

MangoPay SA are our payment solutions provider who handle all of our transactions with the exeption of our IF ISA. Please visit Mangopay to find out more.

Woodside Corporate Services are our payment solutions provider who handle all of our transactions for our IFISA. Their FCA reference number is 467652.

Funds transferred to your wallet will be dependent on your bank transfer times.

Your account will become ‘accredited’ once you have completed the 4-step accreditation process and uploaded your I.D for verification.

If this is the first time you have used your debit card to make an investment with us, it is likely that your bank has cancelled the payment as a fraud protection measure. This is not uncommon, and it will simply require you to make contact with your bank to verify your intention to send funds. You should only have to do this the first time..

Simply select the ‘My Profile’ tab within your account, add your bank account details to the ‘Notes’ section at the bottom of the page. Click ‘Save’ then notify us by email of your account details having been submitted.

All monies will be returned to your eWallet unless notified otherwise.


After Investing

A loan exceeding the due date is referred to as ‘in default’. During the period a loan is in default, you will benefit from an increased ‘default interest’ rate. We have to follow a legal process to possess the property and sell it to repay investors. Please refer to our blog that explains the process in more detail.

Mango Pay are our payment provider for all our products except the IF ISA. They provide online payment services for more than 500 clients in 28 countries. When you make a deposit or investment, that money is held in a ring-fenced account operated by Mango Pay (ING Luxembourg) until the investment is fully funded. Your funds are initially paid into a Barclays account in the UK if you invest by bank transfer, or processed by a Parisian entity, Crédit Mutual, if you pay by card. The funds are then transferred to the above ring fenced account. For further information you can read the following blog. Woodside Corporate Services are our payment provider for our IFISA. They are an FCA-authorised firm (reference: 467652). When you make a deposit or investment it is paid straight into their segregated client money account. which is held on deposit at Metrobank and is operated in accordance with the FCA’s Client Money rules.

No. Your returns are paid as a gross figure as we do not make any deductions for tax. This is the responsibility of the individual member.

The House Crowd issues a tax voucher outlining interest earned on each investment.

When interest is paid will be stipulated in the information for each product. Typically interest on peer-to-peer lending products is paid when the borrower repays the loan. Interest for development loans is payable when the sales of sufficient units have completed. Auto-invest products pay interest twice a year.


Peer to peer lending

The House Crowd typically makes a 4% margin on top of the interest rate paid to investors.

Capital and Interest is paid once the borrower has repaid the loan.

A 1st or 2nd charge will be secured against a borrowers property or land against the loan.

Although there is an agreed term with the borrower please be aware loans can be repaid early, on time and later than the loan term.

Once the loan has completed your capital remains invested for the duration of the loan until repaid by the borrower.


Equity Property Crowdfunding

A Special Purpose Vehicle is a UK-incorporated Limited Company specifically set up for the purpose of purchasing the property.

House Crowd Property Management Limited (HCPM) is appointed to manage the SPV. HCPM duties may include appointing and supervising letting/management agents, maintaining the property, maximising rental income, arranging for bookkeeping/accounting and filing annual returns.CPM will charge an asset management fee of 10% of the net rental generated by the property (e.g. gross rent received less any letting agent or property management fees) and will also be entitled to 10% of the net profit made on sale.

Most SPVs provide that you are free to sell your share to a third party at any time. The House Crowd can help you to find a buyer but please note we will charge a fee for doing so as this is a legal transaction with a degree of paperwork involved. The fee is a minimum of £50 + VAT per buyer that we source for your shares. Please note there is no guarantee you will be able to find a buyer and selling shares in an unlisted company may not always be possible. Please refer to the relevant project investment pack for full details.


Development Loans

  1. All investors capital (in the order we received it)
  2. The developer takes its profit out of remaining funds AFTER all investors have received capital and interest

Your money is loaned to a dedicated House Crowd Developments Special Purpose Vehicle (SPV) which will manage the development project from start to finish.

Once sufficient properties are sold the priority is to repay all investors their capital first and then their interest in that order. House Crowd Developments takes its profit after all the investors have been paid.

Investors are protected by a first legal charge. House Crowd Finance Ltd. [The Security Agent] will act as security agent and hold the charge as trustee on behalf of all investors.

Due to the many reasons why developments can be delayed during construction and the dependence of the sales of the properties themselves we can only give an estimated time frame for investors getting their capital and interest paid.


Auto-Invest

Your interest rate is fixed at a rate of 7% p.a. although, in contrast with a savings account, this rate is not guranteed. You can potentially earn a tax-free average annualised return of up to 8.2% over a period of five years by automatically reinvesting the interest earned.

You will start earning interest 14 days from the date your funds are received.

The minimum investment which can be made through Auto-Invest is £1,000. All investment transactions are in increments of £1,000 and you can top up your investment in multiples of £1,000.

The minimum investment term for our Auto-Invest product is 12 months. You can withdraw your funds after this time with a minimum of 30 days-notice, subject to our terms and conditions.

Your interest is paid twice a year on October 30th and April 30th (or the first working day after these dates). The first interest payment will be made on October 30th 2018.

Your interest will get automatically get paid into your nominated bank account twice a year on October 30th and April 30th (or the first working day after these dates).

Yes, you opt to do so prior to the interest being paid out. If you do so, over 5 years, you could potentially earn an average annualised return of 8.2% p.a.

When you use Auto-Invest, your money is automatically spread across a diversified portfolio of bridging and development loans in accordance with our standard Underwriting & Procedures Manual.

We have found that typically, after taking into account, waiting for new loans to be launched, waiting for the borrowers to complete on loans and loans we have withdrawn from because the due diligence revealed hidden issues that on average investors are only utilizing their money for around 70% of the time. That means even if you earn 9% on every loan you make over the course of a year on average you will only make 6.3%. When you use Auto-Invest, your money is automatically spread across a diversified portfolio of peer-to-peer loans and property developments.

This means:

  • Your money is earning interest 365 days a year with no downtime which means there is a likelihood that your overall return will be greater than selecting individual loans
  • Greater diversification and risk mitigation
  • No hassle of managing a diverse property investment portfolio (we do this for you)

Whilst the interest rate is fixed, the returns are not guaranteed and may vary. Your money will be secured against a number of properties. Should the borrower default and we’re not able to recover the full amount owed (e.g. via the sale of the property) then you may lose some of your capital.

The minimum term of our Auto-Invest product is 12-months and you cannot withdraw funds during that time. In our absolute discretion we may grant a request to terminate your Auto-Invest Loan within the initial 12-month period. If this is the case, you will not be entitled to any interest that has accrued up to the date of the termination. Following the minimum term, you may apply to withdraw funds on 30 days’ notice and we will repay your capital within that period subject to the terms and conditions. However, you will not be able to withdraw any part of your money that has been allocated to a loan that is currently in default until that loan has been repaid. Please refer to the terms for full details.

Your investment is secured by way of a legal charge against the borrowers land/property assets in the loans we invest your money into.

In summary, we do everything we can to check borrowers ID and credit history, the property value, and their ability to repay on time. Please refer to our underwriting manuals for full details.

The minimum term of our Auto-Invest product is 12-months and you cannot withdraw funds during that time. In our absolute discretion we may grant a request to terminate your Auto-Invest Loan within the initial 12-month period. If this is the case, you will not be entitled to any interest that has accrued up to the date of the termination. Following the minimum term, you may apply to withdraw funds on 30 days’ notice and we will repay your capital within that period subject to the terms and conditions. However, you will not be able to withdraw any part of your money that has been allocated to a loan that is currently in default until that loan has been repaid. Please refer to the terms for full details.

If a Borrower defaults on its obligations in connection with a loan made available to it by House Crowd Finance Limited, and House Crowd Finance Limited is unable to recover the capital provided to such Borrower, then House Crowd Finance Limited will, from its own funds, contribute ten percent (10%) of the value of any loss to you as compensation towards any loss suffered.

By way of example:

  • Property valued at £600,000
  • Loan amount £450,000 (75% LTV)
  • If the borrower defaults and the property is sold to recover the loan and there is a shortfall
  • EG Net proceeds of sale: £425,000
  • Net Loss to investors’ capital = £25,000
  • HCF will contribute £2,500 to offset loss to investors


Innovative Finance ISA

An ISA is used by savers and investors to store capital, earning interest tax-free. The tax-efficient wrapper has traditionally come in two primary forms: Cash ISA and Stocks & Shares ISA. The former is utilised by retail savers and the latter by retail investors who want to maximise earnings from their stock market investments.

In simple terms, the rates offered by Innovative Finance ISA providers are typically much higher than the rates offered by Cash ISA providers. In April 2016, the Innovative Finance ISA (IF ISA) was launched. This new ISA product allows investors in the lucrative peer-to-peer lending market to take advantage of the tax incentives offered by an ISA. An Innovative Finance ISA lets you use your tax-free ISA allowance while investing in peer-to- peer (P2P) lending. Investing through an Innovative Finance ISA allows you to achieve attractive returns without having to pay any tax on interest received. With the higher rewards on offer comes higher Risk and there is no FSCS protection. .

Your interest rate is fixed at a rate of 7% p.a. although, in contrast with a savings account, this rate is not guranteed. You can potentially earn a tax-free average annualised return of up to 8.2% over a period of five years by automatically re-investing the interest earned.

Yes. Interest generated from our Innovative Finance ISA can be automatically reinvested and kept within the tax-free wrapper.

Your interest will be paid to you twice a year, in April and October. Or you can choose to keep your interest invested and compound it.

Your interest will be paid into your nominated bank account twice a year.

With The House Crowd’s Innovative Finance ISA you can invest from as little as £1,000 and up to a maximum of £20,000 in each tax year.

We will only be accepting new investment for the time being and will not be able to accept transfers from other ISAs in the 2017-2018 tax year but expect to be able to accept transfers from other ISAs by June 2018

Yes. You can spread your annual allowance over different ISAs but may only have one of each type i.e. one cash ISA , one stocks and shares ISA and one Innovative Finance ISA.

Your money is being loaned and secured against property. As property is an illiquid asset it is important to realise that unlike a cash ISA it is not possible to simply withdraw your money whenever you like. Once your money is invested, the minimum term of investment is three years and subject to our terms and conditions.

After the minimum term you may choose to keep your capital invested or withdraw your funds. If you choose to withdraw funds you must allow three months’ notice subject to our terms and conditions. However, you will not be able to withdraw any part of your money that has been allocated to a loan that is currently in default until that loan has been repaid.

Our minimum investment term for our Innovative Finance ISA is three years – please see above. As you will not be unable to access your funds within this time, we strongly recommend against investing funds you may need during that period.

Your money is invested in secured bridging property development and peer to peer loans in accordance with our standard underwriting policies. We automatically spread your capital over a diverse portfolio of property loans as far as practicable thus mitigating your risk.

Whilst investments into The House Crowd’s Innovative Finance ISA are not protected by the FSCS, your investment is secured by legal charges against the borrower’s land/property which may be repossessed and sold in the event of a borrower not repaying.

Your £20,000 annual ISA investment allowance is not based upon the interest you receive on your Innovative Finance ISA peer-to-peer lending activities – your annual allowance is based upon the amount of money that you invest into the peer-to-peer lending platform during the year.

Monies held within our Innovative Finance ISA are used to make secured loans. All our loans undergo a thorough due diligence process and are secured against each borrower’s land / property. However, there is still a risk that the borrower does not repay, we have to repossess the property and the proceeds of sale of the property are not sufficient to repay the loan. In that event you may lose some of your capital. Read our Risk Warning and Underwriting procedures or watch our Videos on peer-to-peer lending to understand more about the risks and how they are mitigated.

No. Children (under the age of 18) can only have:

  • A cash Junior ISA - they won’t pay tax on interest on the cash they save.
  • A stocks and shares Junior ISA - cash is invested in shares and they won’t pay tax on any capital growth or dividends they receive.

Your annual ISA allowance is specifically for you personally. Your family member's ISA allowance is for them. You may give them the money to do what they want with, but it legally becomes theirs as soon as you do, and becomes subject to possible inheritance tax if you die within seven years of making such a gift.