British Pearl Investment Platform Review
British Pearl is a UK property investment platform that allows you to invest either as a shareholder or as a lender in real estate. When you invest as a lender, you can get monthly income from the interest paid on the loan. You will earn monthly dividends from rent profits as a share-investor.
British Pearl is a UK property investment platform that allows you to invest either as a shareholder or as a lender in real estate.
When you invest as a lender, you can get monthly income from the interest paid on the loan. You will earn monthly dividends from rent profits as a share-investor.
In 2018 they launched their platform and I learned of them when they were running a crowdfunding campaign on Seedrs. Since I decided to invest in them, I needed to check their product as well to see what they were offering.
I have invested in 6 assets with planned annual returns from 8% to 13%. The bulk of the expected return is focused on projected property appreciation, so it does not yield that much in 3-5 years when such properties are sold.
Over the last 12 months the rental dividends amounted to GBP 18. My earnings also include GBP 21 in unrealized price gains for the poperty. And I had to deduct from my gross income the 11.78 GBP fees I've paid to invest in the 6 properties.
British Pearl has just launched a new crowdfunding campaign on Seedrs so I'll add some more funds as soon as new assets appear on the website.
How it Works
Any property they bring on the market is formed into a UK limited company, a special purpose vehicle (SPV), which is separate. In the case of British Pearl going bankrupt your investment is secured this way.
Share holders receive the property's shares and the loan investors invest in a loan backed by the property, with a loan usually between 50 and 75%.
The share holders receive dividends from net rent income during the investment, and the investors receive monthly interest from the loan.
Once the property is sold and the loan has been paid back to the loan holders, the equity owners earn any benefit arising from the price increase of the asset.
British Pearl opts for two forms of investment on the platform: development investments (up to 2 years) and rental investments.
The rental properties chosen are either new buildings ready for occupancy, or properties that require some refurbishment to add value to the investment. All assets usually have a five-year investment period.
I love you being able to move any amount of money through a debit card. The funds immediately appear on the account after using a Revolut card, for example, and you can invest your funds on the spot.
Who should sign up?
Anybody can register on the website from what I see. UK residents do have the right to open an ISA account, too.
Share or loan investor
Will I invest as a loan investor or share investor? It all depends on the risk that you want to take.
Loan investors get a set yield. They earn their loan back at the end of the investment period, plus the monthly interest.
Share holders earn a share of the income from the value of the property after the loan has been paid out. When the value of the property is raised the income can be higher. If the value of the property decreased, they could lose more money.
You don't pay any fees as a loan borrower unless you decide to exit your investment sooner and sell it on the resale market, in which case you pay a premium of 0.5 percent.
As a share investor, at the time of investment, you pay a 2 percent fee, plus a 20 percent success rate fee from any price appreciation of property at the end of the investment term. So, if the property doubled its price over the 5-year investment term, British Pearl will pay 20 percent of the price increase as a fee. If you want to exit your investment sooner and sell it on the resale market, you will also pay a 1 percent fee.
The Primary Market
The list of available investments can be seen on the Properties page. Each property has listed all kinds of financial details, cost of the property, rental income, expected capital gain.
You can choose to invest in the shares or the loan if you decide on an investment. The 2 percent fee is paid at the time of the investment for share investments.
Once you have invested in a property, you can view your investment on the My Account page.
The Resale Market
On the British Pearl website, the resale market is a little strange, because it doesn't have its own page. Instead, each property that has been completely invested has its own segment called Resale Market.
So far, there are only 8 properties on the website and only 2 of them are on the market as the others are still in the funding phase, but still. Having a separate page would perform better.
The offers and prices are different from what I see right now, with offers to sell too high and prices to purchase too small. I think there isn't a lot of competition on the resale market for now.
British Pearl: Conclusions
The British Pearl platform is only one year old and for now there are only a few (8) assets available on the network. I like the user interface that the website provides, although there are some features that I would like them to provide, like a dedicated Resale Market room.
I don't mind that they don't have a self-investing tool because I want to test their products for now. I bet they'll add that in the future, as auto-invest is the latest buzz on all fintech platforms.
British Pearl is governed by the FCA (Financial Conduct Authority) which offers an extra layer of trust.
Roughly 2400 investors have registered on the platform since British Pearl began its business, but only about 500 of them are actual investors. As these 500 investors placed over GBP 2.5 million into the available assets, British Pearl agreed they would increase their minimum investment amount from GBP 100 to GBP 1000 – with less investors but higher investment amounts, British Pearl's team has less trouble.
British Pearl main features and highlights
- Property Investment