Case Studies

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Investor Case Studies

Mazhar Pathan

IT Professional

50 Years Old

Mazhar is 50 years old and works in the Information Technology sector. He was born and brought up in Lancashire and is still a resident in the region.

Chose The House Crowd because: Sharia compliant property crowdfunding product means he can invest in property without compromising his values.

Invested in: Buy-to-let property crowdfunding

What first attracted you to The House Crowd?

I only look for Sharia compliant investments, which means I am not permitted to benefit from lending money or receiving money from someone. So, for example, I cannot deal with interest-based investments like peer to peer lending.

The House Crowd’s property crowdfunding opportunities provide a simple way to invest in property without compromising my values.

Put simply, I can invest to gain equity in a rental property without dealing with interest.

How many projects have you invested in to date?

I’ve invested in one buy-to-let property in Stalybridge, for which I receive quarterly dividends.

What did you want to achieve with your investment?

My main objective was to not have my capital idle and for it not to depreciate. I considered any returns I earned as a bonus. While the returns are not quite as high as I’d initially expected I’m not disappointed at all.

Anything else you would like to add about your experience with The House Crowd?

So far it's been easy and hassle free. I have found dealing with their Member Support team to be a reassuring experience. They are always helpful and friendly.

David Jones

Civil Servant

57 Years Old

David is 57 years old and lives in Wrexham, North Wales. He works as a civil servant for the Department of Work and Pensions. David lives with his wife Beverley and has two daughters and two grandchildren.

Reason to invest: Retirement planning and diversification.

Chose The House Crowd because: Gain a good rate of interest without the commitment of becoming a landlord.

Invested in: Peer to peer lending, Buy-to-let equity crowdfunding, Innovative finance ISA

What first attracted you to The House Crowd?

Initially, it was the attraction of investing into property.

My aim was to gain a good rate of interest without having to buy a property to rent and avoiding the pitfalls that come with being a landlord such as insurance and maintenance costs, unreliable tenants, rental company fees and so on.

Have you invested with other companies?

Yes, I have pensions and ISA’s invested elsewhere but no other investments of this type.

How many projects have you invested in to date?

I have invested in to six projects to date. So far I have invested into property and peer to peer loans. The property investment provides a combination of a decent rate of interest which is far greater the leaving savings on a deposit bank account, with the potential for capital growth. I like the peer to peer loans as I don't have to invest over a long term to get a good rate of interest , I also like the fact that The House Crowd look for a sensible loan to value on the property, which helps to minimise any potential risk.

What did you want to achieve with your investment?

My focus is retirement planning, so I found the Innovative Finance ISA attractive as it will generate a decent return of 7% p.a. which I can choose to take as a tax-free income, paid twice a year, or to have the interest reinvested to accumulate within the ISA.

I also like the fact that that the peer to peer loans pay a good rate of interest without having to invest for the longer term. I like the diversity that the different investments provide.

Anything else you would like to add about your experience with The House Crowd?

So far I have had an excellent experience investing with The House Crowd. The people I have dealt with have been professional, very informative and always answer my queries promptly. The investments have produced what I had hoped for. The team explain everything clearly and I have been able to make an informed choice regarding my investments.

Mark Brabin

Regulatory Compliance

38 Years Old

Mark is 38 years old and lives in Sale, Greater Manchester with his wife Jenny and two boys, Luca (5) and Leo (2). He is a qualified financial adviser by trade but now works for his own company contracted to the financial services industry in the Regulatory Compliance field.

Reasons to invest: Diversify into property as an asset class, despondent with interest rates available elsewhere.

Chose The House Crowd because: Easy to use and offer a much more personal service compared to other investment companies.

Invested in: Peer to peer lending, property development investments

What first attracted you to The House Crowd?

I was attracted to the House Crowd because it was a local company with a North West centric focus for developments. I was familiar with the concept of peer to peer lending but wanted to get a better understanding of the risks and rewards before investing. I attended the seminar in Manchester last year, listened to the presentation then chatted to staff and existing investors. I then made my first investment shortly after.

Have you invested with other companies?

I used to work for a stockbroker so have traded in shares for a number of years. In recent years I’ve moved away from direct share investment to collective investments. I also have a Self-Invested Personal Pension and Venture Capital Trusts.

How many projects have you invested in to date?

4 to date. 3 Peer to Peer Loans and 1 Property Development.

What did you want to achieve with your investment?

I’m looking for a higher return than I would get from cash deposits over the short to medium term.

Whilst I’m willing to accept a degree of risk I’m looking to take on risk which isn’t correlated to stock market returns. The P2P and development loans compliment my existing portfolio by increasing the overall return and offering greater diversity.

Like many I had become despondent with savings products in such a low interest rate environment. I felt I already had enough exposure to the stock market and wanted to diversify into property, however, I didn’t feel I had enough free time for direct investment into buy to let.

You’ve not only invested with The House Crowd, you’ve also moved into one of our House Crowd property developments (Gratrix Park in Sale, Greater Manchester). How are you finding your new home?

The development was in a superb location for working families being so close to fantastic schools and great transport links.

We wanted somewhere that had the amenities of a city suburb whilst also being a great place to bring up children. We found Sale had just the right balance. Having looked at the development in more detail we were highly impressed with the spec of the property and the proposed quality of the finish.

Prior to moving we owned a home built by a FTSE100 builder and found the design and attention to detail in The House Crowd’s Gratrix Park development to be far superior. Even after we had exchanged contracts the developer came back to us with ideas of how to improve the layout.

Overall we are extremely happy with our new home.

Anything else you would like to add about your experience with The House Crowd?

I’ve found the House Crowd to be a pleasure to deal with and I’m looking forward to making further investments. I’m also keen to see how the company will meet the challenge of growing the business whilst still maintaining the personal feel of a smaller company.

The House Crowd has an effective and easy to use website. It has a more personal service than any investment company I’ve dealt with before. The returns on peer to peer loans and development loans are straightforward to understand and there are no additional platform fees.

I like how I get an emailed tax certificate for every investment and proceeds are paid directly to my nominated account on maturity. The House Crowd is also innovative, and they seek to improve their user experience before the user even knows that it’s outdated or broken. They have achieved this over the course of my dealings with ongoing improvements to their front-end website and online platform.

Margaret Nicholls

Retired

Margaret worked for NATO before retiring and now lives in the Cotswolds.

Margaret has over 15 investments with The House Crowd and has been investing with us since we first started in 2012!

Chose The House Crowd because: Confidence in due diligence undertaken by The House Crowd.

Invested in: Equity, Peer to Peer, Development Loans

What first attracted you to The House Crowd?

I like managing my own money and enjoy receiving a higher rate of return than I would from a traditional savings account or ISA.

Have you invested with any other investment companies?

I also invested with Funding Circle and Zopa but the idea of having loans secured against property with THC sounded safer and more interesting

How does The House Crowd compare?

I get the impression that THC's due diligence is far superior to any of the other P2P sites I use. I have more confidence that their projects are being properly monitored.

How many projects have you invested in to date?

I started investing with The House Crowd in 2012 and have over 15 investments including Equity, Peer to Peer and more recently the new Development loans (none of which are in default).

What’s your favourite thing about our investment process?

The new website is excellent, and I look forward to being able to transfer funds in and out of my wallet.

Anything else you would like to add about your experience with The House Crowd?

The responses to my enquiries and the personal relationship I have with the staff at THC have set them apart from other platforms. Because of this THC now have my biggest stake.

Tony Bostock

Retired

60 Years Old

Tony is 60 and lives in a suburb of Nottingham with his wife (Karen). After running their own touring caravan site, fishing lakes and guest house business for eleven years they have recently retired and are now focused on doing the things they love and being near to their young grand-children.

Reasons to invest: Retirement planning, investing for a second income and diversification.

Chose The House Crowd because: Fixed returns and a solid, secure investment that couldn’t be obtained by keeping money invested in the bank.

Invested in: Peer to peer lending, Property development investments and Buy-to-let equity crowdfunding.

What first attracted you to The House Crowd?

I first came across The House Crowd while researching ways to finance our retirement. They seemed to be offering quite a unique proposition so I kept an eye on the company for well over a year before investing.

I was drawn by the buy to let property share deals which seemed to offer a very secure and sound investment when interest rates were ridiculously low.

Since those early days I have invested in a variety of buy to let properties, and my strategy expanded into peer to peer lending and House Crowd property developments.

Have you invested with other companies?

I’ve been self-employed for most of my working life, and so have saved into a personal pension scheme. When I turned 50 I purchased two annuities which resulted in a modest pension.

I have also invested in my own buy-to-let properties which return an average of 5.5% before tax each year. These are good, but they carry maintenance issues and I’ve achieved the same returns with The House Crowd without having to do any of the work myself!

How does The House Crowd compare?

The House Crowd compares very well and I feel very confident about the security of my investments with them. The buy-to-let investments and development loans have been excellent.

Some peer to peer loans I have invested in have gone into default, but to date not one of my investments has failed. They have all done exactly what they said they would "on the tin."

How many projects have you invested in to date?

I’ve diversified my money into 17 House Crowd investments, including 6 buy-to-lets, 1 development loan and 10 peer to peer loans. I also like the look of their Innovative Finance ISA and Auto-Invest products but haven’t invested in those yet.

What did you want to achieve with your investment?

I value the security of investment with as high a rate of return as possible, as these investments form a substantial portion of my retirement income.

Anything else you would like to add about your experience with The House Crowd?

I am very happy with The House Crowd, and I must compliment their staff who have always dealt with me promptly and efficiently.

I’m not the best when it comes to technology and they have been very helpful when needed. Most notably when I accidentally clicked to invest £500,000 instead of the £5,000 I had intended! Not a big problem for them and it was sorted very quickly. I now always check that I have carefully typed the decimal point.

Investments

Longridge

Overview

The nature of peer to peer lending means that, sometimes, the loan isn’t repaid in accordance with the agreed term. Borrowers will borrow money for a variety of reasons, and the exit can be dependent on selling a property, or arranging longer term re-finance. Delays can sometimes happen.

To put this in some context, to date, we have made around 180 loans.

Historically, we have had in total 28 loans go into default over the past few years where we have had to undertake legal proceedings. 71.3% of our loans on the other hand, have redeemed on time.

Of those cases 7 have been fully resolved and, in all 7 cases, investors received all their capital and interest and all or most of their penalty interest as well (at 12% p.a.) their overall returns were higher than originally quoted rate.

21 defaulted loans are still going through the legal process and are at this point unresolved. We follow every legal recourse to recover monies and only when we have run out of any reasonable chance of recovery do we stop pursuing the recovery of monies owed.

To date, no capital losses have been crystallised.

These defaulted loans are the most common reason for investor enquiries we receive in our member support team.

There are two key things to remember:

  1. Your money is protected by the underlying security of the loan (a legal charge over the property), based on the professional valuation of the secured property.
  2. The majority of loans that aren’t paid on time are resolved without us having to repossess and sell the property.

To help give you a clearer picture of how it works, here’s an example of a recent case where the borrower went into default.

Investment Summary

The loan in question was secured against a residential property in Surrey with 3 acres of land , was valued at £1.5m, and offered investors a 1st legal charge and LTV of 69.2% over a loan period of 10 months.

The loan also offered investors an attractive rate of 9% plus an incentive for larger investments.

The loan was scheduled to redeem 2nd April 2018 but due to a delay in the sale, it was actually redeemed 3 months later, on 6th July 2018.

In such an event, our dual priorities are always to work constructively with the borrower to help them achieve their exit whilst ensuring our investors capital and interest are paid out as quickly as possible. We update investors regularly on progress of the recovery proceedings.

Here’s what happened in this case:
Timeline
  • April

    On the 4th April, we were informed that the borrower just accepted an offer on the property for £1.9m, but as the sale of the security had not yet completed within the agreed timeframe, it would now be classified as being late paying. After being alerted to the delay, we informed investors by email – these are normally sent personally from Clarissa . While the reasons for the delay were reasonable, we nonetheless put our default process into action, by starting the process of securing a court date to secure the repossession of the property.

  • May

    As May arrived we were still awaiting an update from the borrower, and the conveyancing process continued to hold up the proceedings. At this point we continued to pursue repossession procedures and waited for an allocated court date. As the month drew to a close, we received an update that informed us that the exchange on the property sales would be taking place shortly.

  • June

    The beginning of the month saw the solicitor in charge of the sale request redemption statements from our own solicitor. Our solicitor then proceeded to chase the borrower’s solicitor for an exchange date for the sale. They were told that the exchange on the sale of the security was anticipated to occur on 6th of July.

  • July

    On the 6th of July the completion went ahead as expected and the loan was fully redeemed.

    Investors received all their capital and interest by the 13th of July, including additional interest added as a result of the borrower paying late. With the late repayment penalty fees, this meant that investors earned an actual interest rate of 10.6%.

It must be emphasised that the above scenario is just one real life example of what happened when a borrower went into default. No two cases are the same and we must stress that your capital is at risk when you make a peer to peer loan and you may not receive all your interest or capital.

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