A new crowdfunding platform says it’s opening up property investing to “a whole new generation.”
Allbricks claims it’s disrupting “the antiquated mortgage market” by allowing a buyer to purchase units of a property, which it calls ‘bricks’. Each brick has a minimum value of £100 or one per cent of the property price, whichever is higher.
In theory, property investors then fund the rest of the purchase price via the crowdfunding platform, with stamp duty split proportionally. The buyer pays rent to the investors at market rates on the ‘bricks’ they don't own.
Available initially in London with a view to scaling up to the rest of the UK, the people behind the scheme say prospective buyers - whether first timers or moving up the ladder - can potentially afford to buy any home they could afford to rent. It describes this as “true gradual home ownership” as homeowners can buy more bricks over time or buy their home outright.
Allbricks is available to first-time buyers and home movers who pass affordability checks, and they can choose any sort of property - this is not restricted to specific developers, new builds or leasehold properties.
“As there’s no mortgage and no debt, the home buyer’s purchasing power is based on what they could comfortably afford to rent rather than mortgage-based income multipliers” says a statement from Allbricks.
It continues: “Ultimately, the homeowner is in the driving seat. Provided they keep up with monthly payments, they can keep pets and make their own interior design choices (as long as they don’t reduce the home’s value). Once the first investors have owned their bricks for three years, homeowners get the chance to buy five per cent of them annually. And the more the homeowner buys, the smaller their rent payment to the investors.”
There’s also a property management programme on offer which includes a dedicated property manager, buildings insurance, regular gas/electrical safety inspections and an annual repairs budget.
An advisor to Allbricks is Athena Hubble - formerly managing director of the collapsed property portal Boomin, set up by the founders of Purplebricks - and she says: “The Allbricks approach is truly innovative and a fresh take on an old problem. Between the time it takes to save for deposits, affordability limits imposed by mortgage providers and now interest rate rises, it’s an almost impossible environment for buyers of all kinds.
“We know it can take over 10 years to save for the traditional deposits required by mortgage providers. There are millions of renters or homeowners with one to four per cent deposits already saved who will now be free to buy the home of their dreams or move up the property ladder. Allbricks could make the instability of traditional renting a thing of the past and make buying a home in London achievable once again.”
Allbricks chief executive Shahram Shaida adds: “Mortgages have been helping people into homes since the 12th century, but the world has moved on - we’ve now got outdated systems of lending dragging people down with them. Other solutions have just tinkered with different mortgage levers, but we’ve created a whole new model. The launch of Allbricks today brings a modern alternative, developed over six years, that democratises wealth creation by unitising UK home ownership and property investment.
“We’ve written off a generation, casually calling them ‘Generation Rent’, when they still want to own their own home. A system that’s more inclusive, that keeps people in their communities and makes home ownership more accessible is well overdue.
“My mission is to put the fading dream of home ownership back within reach. By bringing together those who want to own a home and investors who can contribute to that goal, we’re aiming to disrupt a market that has been closed to so many for too long.”
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Not everybody wants the hassle of owning their home , renting is so much more flexible
Agreed, I am sure there are plenty of people who could buy but choose not to. There was a mortgage advisor on the TV the other morning who kept saying that buying is better than renting. I know they would say that, but as we know if you rent you don't have any maintenance costs and you can easily move house if need be.
Agreed renting has its place, after all I am a landlord, but would you tell your kids not to buy but to rent long term? I am retired sitting in a mortgage free £650k house with just running costs to pay and the option to downsize. God knows what the rent would be on this house and I would be at the mercy of the landlord who may ask for his house back.
Most people want to buy eventually but when you are young & moving around the country, changing jobs etc, renting is more flexible. With conveyancing taking 5 months or so now buying & selling repeatedly before you finally settle down is really tricky to manage.
So a shared ownership scheme. Good luck with that. I'd agree the current mortgage lending system could be improved mind you, with all the risk currently on the borrower.
Hi, actually Allbricks is not part of the government shared ownership scheme. They have similarities but we've worked hard to take out the elements that don't work for the home buyer. We can't paste links but in the knowledge centre on the allbricks . co site you can see a direct comparison explaining the differences.
I didn't say it was part of the government scheme, I said it was a shared ownership scheme, which it clearly is if you don't own 100%. Someone else owns part of the property.
Its easy to disprove see how much Mortgage repayments are compared to renting, property need 10% up front as well.
Everything is more hassle and work load like the right 2 rent and share codes. like 5 shares on one Contract, so you received 5 passport copies & 5 Share codes 10 sheets of paper with no reference to tie one to other, right do your check see how they on and match them up. Alright all you Office people tell me how easily it is, but I am a real LL not an office worker, you want to swap places and do my work.
Sounds like an advert for a company looking for mug investors, boomin market, bankrupt market.
Christopher. Don’t downsize whatever you do when you have a sensible size house. I seen too many people do that and regret it, if you are downsizing you’ll probably end up with a Flat and hate it.
No intention to. We are selling rentals and reinvesting elsewhere for an easier life, my wife has a good pension and I have an untouched pension pot. reaping the benefits of hard work and no divorces. We have found that when you retire you need a bigger house, kids pair off and breed, the family gets bigger.
Former MD of collapsed Boomin, well that really inspires conference doesn't it ?
It must get very complicated when you partly own a property. When it comes to maintenance or improvements, who makes the decisions? Do you go for the cheaper options or the more expensive better quality options? Do you have to have a consultation every time a decision is required? The paperwork must be a nightmare.
Unfortunately I don’t trust the model as I believe the council will end up trying to designate this as a licenced property even though mortgage works the same way. They will ‘invent’ a liability and pin on the investors and we will be at the mercy of the home ‘non owner’. The five figure fine threats will soon follow. Also one of the people has a poor CV for this ‘prop tech’ idea. And that is what it is a desk bound idea to gain investment
There is no need to buy to have a permanent home you will be able to live permanently forever in someone else’s property Mortgage free.
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