The fallout from Lendy’s reported woes has launched a flotilla of lazy journalism, poorly-informed opinion pieces and Chicken Licken style warnings to investors.

Meanwhile, experienced investors in property finance are merely rolling up their sleeves and getting on with business as usual. Risk is part of life. Understanding which risks, how much of each to take and the price you exact for it is how an investor makes money.

This much would seem obvious, but not, it seems, to the jittery herd of financial journalists commenting on this particular situation.

The spectrum of real estate lending is broad and varied.

At one end of the scale we find investment loans, which tend to have strong covenants on long leases and a robust income stream that services the debt.

At the other end – bridging loans, which are short term, with repayment coming through either a sale or refinancing following an event such as the granting of planning permission.

Generally regarded as the Bellwether of property lending, bridging lenders are usually the first into the market cycle and often the first to drop out. Lending tends to be at credit card rates, since until permission is granted, there are too many unknowns (including the financial cost of any Community Infrastructure Levy or S106 Agreement – the charges that local authorities make on new developments to help fund infrastructure, schools or transport improvements – vital to support new homes and businesses in the area).

In between is a vast and multifarious landscape, taking in low-risk borrowers with low risk deals to high risk borrowers with high risk deals. It also – crucially – includes well-run platforms operating in the higher risk space that give plenty of information, have high levels of due diligence and price the risk fairly so that investors can make informed decisions.

Somewhere in this Big Country is Lendy, ploughing along in its covered wagon, braving the arrows and potholes as it goes.

Now, I don’t intend to comment specifically on Lendy’s business, save to furnish enough background to give us some perspective on the case:

Lendy recently appealed to the regulator after one of its borrowers threatened to sue. They claimed Lendy failed to give notice on loans and arrange further funds. Concerns were also raised over the fact that £112m of its £180m loan book were at least one day late. As we understand it, this deal was not a bridge but an expensive development facility.

Now, to the uninitiated, this will set all sorts of hares running. But those who regularly walk the streets of the bridging world will know that what looks like a situation going wrong is probably expected and planned for. It’s a way of increasing returns – on what, in the US, is often described as “hard money”.

With developments, just because a project is taking longer than expected, it doesn’t necessarily mean the deal is deteriorating. Lots of factors determine the progress of construction – some beyond anyone’s control, like weather.

But financiers know this, and also that when deals go beyond the due date, the interest continues to accrue. Sensible lenders will also build delays, cost increases and falling values into their sensitivity analysis but still impose a fairly tight schedule on the borrower.

Whether the 12% return Lendy investors get is enough to cover their risk is a matter for them. The reality of the market suggests that if investors are getting 12%, then the borrower is paying somewhat more – and you should ask yourself what kind of borrower is happy to pay this much for their senior debt (CapitalStackers borrowers are charged substantially less). But I will say that this is an area where the astute investor should take very great care to ensure his own risk is adequately compensated for – and to be clear, the key risk is this:

Any investor taking part in a deal that is not fully funded at the outset is entirely dependent on new investors coming on board to pay the contractor, without which the project will fail to complete.

In our view, certainty of completion is a fundamental prerequisite of any property deal. It’s inconceivable that we would expose our own investors to the risk of a development that may never come to fruition.

We have no intention of letting our investors take the liquidity risk when a big, strong bank can take it for them.

This is the main reason why we choose to partner with banks as part of our strategic business model. We raise the funds necessary to plug the gap between what the bank will lend and the borrower’s equity. And we make sure that our investors’ funds are deployed after the equity. The banks commit to the finance up front, so we can be sure the funds are in place to finish the job.

Certainty. Right there. Locked in before an investor parts with a single penny.

And while it follows that this means our investors are not in the First Charge position, they’re certainly rewarded appropriately for their Second Charge position, with the added comfort that comes with the removal of doubt, and the fact that a bank sees the deal as worth investing in.

This is the main reason why CapitalStackers’ default rate remains at zero. We always run our financial analysis on the assumption that everything is built out before anticipating any sales revenue after a conservative sales period. That means we get to the end game without having to rely on new funding coming in. We believe that not to do this would be to take an insufficiently conservative view of the world.

Among the other reasons are:

1. As we’ve established, our investors are never invited to take part until all funding is in place to complete construction.

2. We don’t move until detailed planning consent is secured. We stick to “Oven-Ready” deals – otherwise the outcome is too opaque. Pointing P2P investors to deals before this point is somewhat irresponsible, unless the risks are made extremely clear, and/or the Loan-to-Value ratios are very low. But even if they were, we just wouldn’t do it anyway.

3. We secure regular information and updates from our borrowers and monitoring surveyors (which is then passed on to our investors). So at all times, the people who fund our projects are fully aware of what risk they’re taking, whether that risk is changing, and what they will earn for taking that risk. So they’re fully informed to take whatever decision they want to take. And if they’re involved in a deal and decide for whatever reason they don’t want to be, they can advertise it on CapitalStackers’ secondary market and seek to recoup their capital.

This should all be meat and drink to experienced investors, though. This is how the banks have always done things: information + risk = appetite + return.

Of course, there will always be bad deals and bad operators, despite the best efforts of the FCA – it’s a fact of life. But among the rest, it’s a question of assessing the risk, and deciding how much money would make you comfortable enough to take that risk.

In other words, there’s no such thing as a bad risk – just ones you’re happy to take, and the ones you’re not.

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CapitalStackers is authorised and regulated by the FCA. Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other peer to peer lending platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.

A property investment is always more appealing when elements of it have already been tried and tested.

That’s what makes Midwood House so attractive. It’s an investment opportunity to expand an already financially proven scheme, promoted by a long-established, profitable development company whose management have dealt with CapitalStackers’ principals for decades.

The Loan-to-Value ratio is a trim 38%, which has pegged the return at a very respectable 7.5% – since CapitalStackers will take the position of senior lender and therefore secure first charge on the property.

Osborne House Ltd, a conservatively geared property company with a net worth of around £6.5m, originally acquired this former office block with their own cash and converted half the building to 17 en-suite studios. Within a month of completion, it was fully let, reaping a net income of around £65K per annum. The lettings experience to date has produced a strong, reliable income stream and few voids, thanks to the initiative of including energy and Council Tax in the tenancy.

This unquestionable success has led to OHL seeking funding from CapitalStackers investors to develop the rest of the building along the same vein – a further 17 studios, taking the total to 34.

Following an estimated six months refurbishment, the new units will be available to let and are expected to increase net income to £130K per annum.

Of course, while construction carries a degree of risk, in this case that risk is mitigated by the appointment of the same contractor as successfully completed the phase 1 works, along with an independent monitoring surveyor who will be under a duty of care to CapitalStackers’ investors. And, of course, income will continue to flow from phase 1 pending the new units coming on stream.

Loan investments are invited from £5,000 upwards. We recommend viewing this opportunity as early as possible, since it bears all the hallmarks of being subscribed very quickly.

Note: This is a residential investment loan. Consequently, pension fund investment is prohibited by HMRC rules.

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CapitalStackers is authorised and regulated by the FCA. Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other peer to peer lending platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.

AltFi wants us to say what we think about tighter regulation – we think it’s more important to say what our customers think.

So here’s a follow-up to our blog of 28th September, and in response to this AltFi article on 8th October.

The useful and informative AltFi website – fast growing into the oracle of the alternative and digital finance industries – has reproached FinTech companies such as ours for “timidity” in the face of the FCA proposals to tighten regulations – in particular, to limit the amount that “unsophisticated” or first time investors can invest. It says we should have galvanized our investors to sign their ‘Trust the Investor’ petition.

Perhaps so, but it’s not a good look for an industry to cry “foul” at the first signs of a professional framework being put in place. Responsible platforms, who are meticulous in the way they conduct business on behalf of their investors, should welcome regulation that brings the less stringent operators up to their own standards. We’d rather the playing field was levelled from the top, because improving practices (and the resultant public perceptions of our industry) benefits all of us. Rogue operators benefit no-one, and they should be forced to pull up their socks or bow out.

So we didn’t feel it our place to take umbrage at the proposals. Our opinion is hardly relevant. What is relevant, however, is the opinion of those who invest their hard-earned nest eggs into platforms such as ours. Do they feel their money is secure? Do they feel they’re fully informed of the risk involved? Are they sufficiently updated?

And – most important of all – do they feel the need for the FCA to further protect them against P2P practices?

This, we felt, was an ideal opportunity to canvass the opinions of CapitalStackers investors. How do they feel we’re doing, and do they want for more tightening?  It appears not.

We were pleased to see that our investors gave us an average score of 9 out of 10 when asked to rate the information we provide, our risk assessment, due diligence and our clarity and transparency. Our risk management deal pricing and general security were scored at an average of 8.5.

However, when asked to what extent they would welcome the FCA limiting the amount they could invest, the score came in at an average of 2.5.

But it’s not for us to put words into our investors’ mouths. We’ll let them tell you what they think of us in their own words.

Here are the responses we received to our questionnaire. The comments are anonymous, and we’ve edited one or two for length, but we’ve left them exactly as they were submitted, warts and all:

I totally oppose the FCA limiting the amount that anyone can place with CapitalStackers without taking the advice of an IFA….The fact here is that CapitalStackers carries out due diligence on all projects handled, and only when satisfied with the outcome of same, then moves a deal forward providing detailed information to its investors.
I think CapitalStackers explain the risks and rewards well. There is no requirement for the FCA to become too involved.
I trust CapitalStackers to invest wisely.
I think the website could be made slightly more user friendly and make it easier to find important information, perhaps a side bar explaining each area and how to locate that info. As regards the FCA limiting the amount people can invest, that must depend on how sophisticated each investor is and whether they fully understand the risks involved. In that respect, perhaps there should be some examples of what can go wrong with a property loan and a worst case scenario potential loss situation.
If the FCA does decide to limit the amount people can invest, 10% is too low. 20% or 25% would be better. However, as a sophisticated investor, I have been cautious anyway and not invested more than 10% of my portfolio. Once the channel and Capitalstackers have proved themselves and loans have been repaid with the agreed interest, I will invest a greater proportion of my portfolio, though still maintaining a good mix of asset classes.
I would not describe myself as a sophisticated investor, but I always believed that the whole point of peer to peer investments was that it enabled people like me to participate in investing directly compared to other types of investment from which we are excluded. I started investing in peer to peer about 12 months ago and I have been pleased with the outcome so far. I had absolutely no previous knowledge or understanding and carried out my own research before committing any money to investments on peer to peer platforms. I avoid any platforms that do not appear transparent or are too complicated to understand. I am capable of making my own judgement on this and do not need the government to take control of my investment decisions. I should add that in spite of the fact that my knowledge and understanding has been acquired through my own research and I am definitely NOT a professional or even greatly experienced at investing – the ONLY time I have ever lost money was by following the advice of a financial adviser. Since that time I have ‘gone it alone’ and over the past few years I have successfully increased my capital through investments that have been entirely my own choice.
I invest with confidence in CapitalStackers. They have a very experienced team in both finance and building development. As they are very selective in their choice of investment deals and, from my own experience, I’ve found CapitalStackers to be meticulous and diligent, I would not agree with limiting the amount one can invest. It should be a personal choice.
As an experienced investor and owner of a commercial property portfolio [I am] very comfortable with proportionate risk and due diligence by CapitalStackers. The individuals involved in CapitalStackers have my complete confidence and for that reason I am happy to keep investing.
I think the FCA should spend time checking that p2p websites are providing transparent and accurate deal information so that investors can make properly informed decisions, rather than trying to dictate what people invest in them.
This type of funding seems very transparent and well explained compared to others.
Well run peer to peer funder which understands its market
Most investments carry risk and an individual has to take responsibility for his/her decision.
I know what I am doing and don’t need to be nanny-ed by an organisation that was unable to spot the last financial crash.
It’s not up to the FCA to determine what clients do with THEIR money. All they should be doing is providing the right framework, governance and controls.
I like the CapitalStackers model as second charge funding for developers, alongside (though behind) mainstream lenders. The info available is very extensive & thorough. Actually, I would like to invest MORE in CapitalStackers, but opportunities are few and far between and often fill quickly – literally sometimes within minutes of release.
Restricting P2P access for retail investors strikes at the heart of the concept of the innovation of a market by the people for the people. FCA role should be to police the platforms to ensure high standards and enable market choice for investors.
As usual the controlling body, rather than addressing the real issue, is trying to abdicate responsibility by yet more layers of bureaucracy. The best way for the FCA to protect the investor is to investigate the poorly operated providers and apply severe sanctions and penalties and, where necessary, withdraw authorisation. It is the responsibility of the FCA to do this, not restrict the investment options of individuals in a free market economy. If the FCA had confidence in their own regulatory regime and their policing of the businesses falling within it, a more obvious methodology to protect smaller investors would be to extend the financial compensation scheme to cover this sector. Assuming this is done at the same time as policing the whole sector effectively and weeding out the providers who fail in the Financial Times article this would reduce the risk to smaller investors at the same time as boosting the businesses who are operating as responsibly in this sector as any other mainstream investment falling within the FC scheme.
Limiting the amount invested by regulation is unnecessary. The advice currently given, (10% until familiar) is sufficient.
I’m more than happy to invest my money through Capitalstackers. The information they provide me allows me to assess the risks as thoroughly as possible. Armed with such information it is up to me whether I invest or not. It is also up to me how much I invest. It is my responsibility and the buck stops with me. The FCA should ensure points 1 to 4 of the blog are met by all P2P platforms.
CapitalStackers is a very highly professional p2p platform and by investing in construction loans, I know the associated risks which are also explained on the platform. CapitalStackers’ risk assessment allows me to choose between loans by having the relevant and detailed information about them. Returns are high but CapitalStackers provide a very detailed illustration about the investments’ features and the entailed risks. There are only two things I complain about: the first is the limited numbers of available loans and the second is the entry level of £5000. I would prefer £1000 in order to have a better diversification.
The detail of your dealing room is exceptional. There is a learning process to understand the CapitalStackers offering but once understood it is, in my experience as a lender, excellent.
Regular updates provide clarity and reassurance, very detailed information provided.


Blog Investor News News

CapitalStackers is authorised and regulated by the FCA. Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other peer to peer lending platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.

Any responsible lending platform should have nothing to fear from tighter regulation aimed at further protecting investors. 

Having said that, a truly responsible platform will already be working to maintain standards well above those imposed by regulation.  

So as the P2P industry digests the long-awaited proposals on its new marketing and disclosure rules, we thought we’d examine what differences they will make for those involved in CapitalStackers’ unique brand of loan-based crowdfunding to property developers. 

Working through the five key points raised by the Financial Times it seems life won’t be too different. Let’s take the points one by one. 


The FCA voiced concern that many P2P platforms tended to run overly complex business models, often choosing and managing investors’ portfolios for them in order to achieve a target return. They expressed unease about the mismatch of expectations between what the investors think they’re getting, and what they’re actually getting. 

With CapitalStackers, this has not been a problem because we don’t do pooled lending. Our risk assessors examine the fine details and set a fair and transparent rate for the risk involved on each deal. Investors can see clearly what deal they are investing into, what risk they’re taking and choose the return figure to suit their own particular appetite. 


The FCA has said that some platforms fail to communicate clearly to investors the true nature and risk of the investment they will be exposed to. 

We’ll leave this point for one of CapitalStackers’ investors to answer directly: 
“I invest from the point of view that loaning to construction always carries risk, but with CapitalStackers’ due diligence, I’m confident that everything that might possibly go wrong is covered in the information presented. They tell it as it is in the risk assessment, and the returns are outstanding.” – Brian Gough 


In some instances, the management of risk could be improved – and it was not made clear that the interest paid by the borrower to the investor was linked to the credit risk.  

With CapitalStackers, the very highest standards of risk monitoring and management are maintained throughout the deal right up to the point of repayment. As far as risk pricing is concerned, this is made crystal clear. The loan to value ratio is always shown alongside the rate of return and investors pretty much know the borrower’s inside leg measurement, so assiduous are the risk assessments. 

Given that CapitalStackers almost always arranges loans in collaboration with a high street or challenger bank, investors might be forgiven for thinking that we would be satisfied by the bank’s due diligence work. In fact, the opposite is true and our risk assessment and the way we report is much more stringent given we are usually at higher loan to value ratios. Our retail investors are important to us and we strive to protect their interests. 

The FCA also stipulated that P2P platforms offering a target rate of return must be able to determine with reasonable confidence that this return is achievable. 

Granted, this can be pretty opaque in the context of pooled lending. However, it’s much easier to achieve on a direct lending model like CapitalStackers, where we always provide a comprehensive appraisal detailing the risk and reward specific to each and every investment.  


The FCA highlighted that in general, P2P loans are unsecured and that investors’ ability to exit the agreements is not assured. 

With CapitalStackers, all loans are secured on the property being built. The bank naturally holds the first charge and CapitalStackers Trustees hold the second charge on behalf of our investors. Furthermore, the developer must inject cash equity commensurate with the risk involved – usually around 10% of costs. We also insist on an appropriate cost contingency in the development appraisal. Which, when you take into account the development profit in a deal, means a lot has to go wrong – and we mean a lot – before investors’ capital is at stake. 

Exiting a loan is always going to depend on other investors having the appetite to take you out and that can never be guaranteed. However, for those few investors who have sought to exit early, all have quickly sold-on their participations, recouping capital, interest and in most cases a profit.   


Finally, the FCA stated that they will require investors to self-certify as Sophisticated or High Net Worth investors, or to take advice from an IFA, or to undertake not to invest more than ten per cent of their net portfolio in P2P assets the first time they invest.  

Of course, we’d be the first to admit that any P2P investment should be undertaken by those who know what they’re doing. We take great pains to explain to any CapitalStackers investor what they can expect and not expect, and it seems reasonable to us that people don’t invest more than 10% until the platform has proved itself to them. However, we should point out that the likelihood of investing in P2P through an IFA is slim, since most IFAs and wealth managers choose not to advise on this nascent asset class. 


So, as an investor in CapitalStackers, you might wonder what all the fuss is about. The protections and transparencies which the FCA seeks to impose have been part of investment life for you since the start. 

But we’d be interested to hear your views on everything you’ve read, since the FCA is inviting responses to its proposals before the 27th October. 

For instance, if you don’t qualify as High Net Worth or Sophisticated, do you agree with the proposal to initially limit what you are allowed to do in this space until you find your feet? Or do you feel that this is an inappropriate imposition and a step too far?  

In terms of crowdfunding to the small building sector, this type of investment has been the salvation of many a business and led to many schemes being built out which had laid dormant since the banking crisis.  

So perhaps you may feel that rather than limiting what a small lender can do, the FCA should point its big guns at those P2P platforms which fall short of what’s required and force them to raise their standards. 

Now is the time to have your say. CapitalStackers is run for its investors, so if you have a view, we will certainly include it in our response. 

Please do email us at: We look forward to hearing from you. 


CapitalStackers is authorised and regulated by the FCA. Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other peer to peer lending platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.

£400,000 was raised in just one hour to help fund a bucolic waterside development of 22 houses in the pretty Yorkshire market town of Thorne, within a 45 minute commute of Leeds, Hull and Sheffield.

CapitalStackers investors stand to make annualised returns of between 10.28% and 12.92% against Loan to Value ratios of 51.1% and 54.4% respectively.

The development has attracted senior funding of £3,386,050 from United Trust Bank. The developer, SPG Property Services Ltd, has introduced the entire site as security, which has outline planning consent for a further 57 houses, in addition to the 22 being built in phase one.

The scheme has been well-planned and priced by this experienced developer of 15 years standing. The picturesque setting of Thorne, known locally as “Little Holland” has two railway stations, excellent motorway connections, good schools, sports clubs, shops and a decent range of pubs – factors which will account for the fact that 13 of the 22 houses have already been reserved and the agents have received over 100 enquiries before the marketing has been fully launched.

Phase one is a mix of 3, 4 and 5 bedroom houses, plus two bungalows, each with a parking space and all priced between £135,000 and £250,000.

CapitalStackers’ due diligence presented the investors with a comprehensive analysis of risks, mitigants and sensitivities.

Investors can expect to be paid out by November 2019.

Blog Deals Investor News Press Releases

CapitalStackers is authorised and regulated by the FCA. Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other peer to peer lending platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.

CapitalStackers investors can look forward to a return of up to 14% from a development of nine luxury flats in an established and popular residential road in Solihull.Front Elevation

The project is the latest scheme by Avalanche Capital – the successful team that some will remember repaid investors early when their spacious Chessets Wood dwellings were built and sold ahead of schedule in December last year, paying annualised returns of between 9.8% and 13.8% after just 7 months.

This latest scheme is to be built on the site of a large, unoccupied dwelling which will be demolished to make way for spacious, well appointed 2 & 3 bedroom apartments ranged over three floors.

The construction finance of £2,025, 000 is being provided by NatWest and the developers are contributing £900,000 of their own funds, leaving a crowdfunding opportunity for CapitalStackers investors to raise £930,000. Investment bids are invited from as little as £5,000.

“Excellent” levels of profit are expected – the site has already seen a substantial rise in value following planning permission, and confidence is further enhanced by the appointment of John Shepherd Estate Agents (who have previously sold Avalanche developments at better than appraised values) as the selling agents.

Deal Infogram - St. Bernards Road by Avalanche CapitaWe have adopted a conservative figure of £5.8m pending formal valuation, which results in a respectable Loan-to-Value ratio of 55%. It’s worth noting the agent anticipates selling for around £6.3m.

Given the above factors, investor demand will be extremely high when bidding opens at noon on Tuesday 10th April – so if this sounds like the right sort of investment for you, please don’t miss out.

So that you’re ready to invest when the auction goes live, if you’re an existing member, you can familiarise yourself with the details of the deal now by clicking here. If you don’t yet have an account, you can sign up here.

Blog Deals Investor News News

CapitalStackers is authorised and regulated by the FCA. Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other peer to peer lending platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.

Building begins this month on a sympathetic development of 2, 3 & 4 bedroom stone houses in the Nidderdale Area of Outstanding Natural Beauty.

Gregory Property Group – who have an excellent track record of successful developments over the last 30 years – have completed the drawdown of £504,000 funding for the first 11 houses, which is the first phase of 22 dwellings in the sought-after, picture-postcard village of Dacre Banks.

The development augments the area by adopting former vacant commercial land – and when completed will have a value of £5.8m. This will furnish annualised returns for CapitalStackers investors of 12.6% to 17.1% over 18 months – at Loan to Value ratios of 65% and 74% respectively – depending on which risk layer they have chosen.

As well as arranging the crowdfunded segment of the loan, CapitalStackers also negotiated the construction facility of £2m with Hampshire Trust Bank, one of its senior debt relationship lenders.

Sylvia Bowden of CapitalStackers said “it’s encouraging to find that we’re attracting new investors with each new deal published. The list of registered members continues to grow, with an average investment size of around £67,000 – although it is possible to invest as little as £5,000 with CapitalStackers. To meet the growing demand for investment, we are trialling a new policy where CapitalStackers invests in developments itself and then releases loans onto our secondary market, to make opportunities available for recently joined members”.

Not only does this exceptional development further adorn one of Yorkshire’s foremost areas of outstanding beauty – it will enrich and diversify the local population. It will attract a mix of young professionals, families and downsizers lured by rural village life, and commuters to Leeds and Harrogate, it also offers further proof of the escalating popularity of loan-based property crowdfunding as a consistent route to double-digit returns.

Blog Deals Investor News News Press Releases

CapitalStackers is authorised and regulated by the FCA. Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other peer to peer lending platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.

There used to be a game show on TV called It’s a Knockout, where amongst lots of other silly games, contestants – wearing daft costumes that made walking difficult – used to carry buckets of water across a slippery surface whilst being bombarded with water cannons or sandbags, to try and fill a receptacle at the end of the course.

Obviously, they spilt a lot along the way and were occasionally wiped out altogether and had to start again. But there’s no doubt that if they were dogged enough and did it for long enough, eventually they would fill the receptacle.

This often seems to me to be a good analogy for the stock market.

The award-winning financial advice website, “This Is Money” ran an analysis last year confirming much the same. If you’d invested over any ten year period over the last two decades (except two dodgy phases in the dotcom boom and the financial crash), you were 95% likely to turn a profit. And assuming you reinvested your profits, the average return generated would have been 70%!

Sounds like investment Nirvana, doesn’t it?

But let’s examine those figures a little more closely.

And – for now – we’ll set aside those periods of heart-in-mouth panic as you watch your stock slide and gnaw your fingernails away as you decide whether or not to leave your investments where they are. That’s all part of stock investing, seasoned veterans will tell you. Take your lumps like you take your jumps.

If we accept that you’ve ridden the roller-coaster, pushed your ticker back down to its rightful position each time the market bounced it up into your throat, fought against all your instincts to reinvest hard-earned profit back into the maelstrom from whence you’ve just extracted it…what are you left with?

A 70% profit over 10 years! Sounds like a lot if you consider that if you’d started with £100,000, you’d now be sitting on £170,000.

But over 10 years? If we spread that out on an annual basis and apply a little simple compounding, it amounts to just 5.45% per year. Is that a fair recompense for all the cardiac distress?

So is there an alternative? Property?  Well, it’s more secure, but again, it ties up your capital for years.

So if you could make an annualised return of three times that amount without all the turmoil and without the long-term capital handcuffs, wouldn’t you consider it? Heck, wouldn’t you even do it for twice that average stock market return?

That’s why smart investors have started looking at loan-based crowdfunding of property. Lending to screened-and-approved developers looking for investment to get their projects off the ground. Usually, they’ll have agreed bank funding for around 60% of the building cost and they’ll have their own equity to sink into it too. But the capital gap in between is increasingly being filled by crowdfunders on the FCA-authorised CapitalStackers platform.

And it can be impressively lucrative. Recent investors in a CapitalStackers funded development in York made annualised returns of up to 22.5% in just eight months.

More typically, investors in two current CapitalStackers deals are set to make annualised returns of between 10% and 17%. Those figures look even more attractive when you know that all CapitalStackers investors are able to choose their own return, predicated on the level of capital risk they’re prepared to take (although the risk itself is not terribly off-putting, given that the investment is secured on the property, the developer’s equity/profit is there to cushion any drop in value – and the Loan-to-Value on these deals is within a sensible range of 55% to 72%).

So how might this kind of investment compare with the stock market?

Well, taking a mid-point CapitalStackers investment as an example: If you were to start with £100,000 – on an agreed return of 13.5% – after one year, your nest egg would be worth £113,500.

After two years, you’d have £128,822.

Impressively, you’d have overtaken your stock market earnings in just over four years, and after ten years you’d be sitting pretty on £354,780. Which makes those nerve-wracked stock market investors with their £170,000 look like dabbling amateurs.

As with shares, you don’t need a huge amount to get started. The minimum investment in a CapitalStackers scheme is just £5,000 – but many invest a lot more.

And considering you can access your capital by selling your investment on the secondary market, it’s no wonder more and more of the smart money is moving to loan-based property crowdfunding.

Find out more at or
by calling 
Steve Robson on 07774 718947
or Sylvia Bowden on 07464 806477
or Tony Goldrick on 07788 373126.


CapitalStackers is authorised and regulated by the FCA. Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other peer to peer lending platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.

As the gurus at Motley Fool sound the death knell for Buy-To-Let, calling it an “expensive distraction” and point investors once more to the Stock Market, some more canny investors are sitting back and wondering if there is a third way.

After all, there are good reasons why we British have traditionally invested in property. And yet the FTSE also has very sound reasons to commend it.

But for those who want double digit returns but without the bumpy stock market ride, there is a way to achieve the benefits of both property investing and stock market investing in one, and reduce the drawbacks of both.

Secured on property, but more liquid than buying bricks and mortar – and less volatile than stocks and shares – it consistently brings higher returns than Buy-To-Let, without the overheads, management and conveyancing fees, refurbishment and maintenance costs and stamp duty.

Motley Fool suggests that in every respect other than the ability to borrow to invest, the Stock Market beats Buy-to-Let. And it surely does.

However, loan-based property crowdfunding has many of the advantages listed too. Investing in property developments through CapitalStackers, for instance, can bring you highly attractive risk weighted returns in the time it takes to build a row of houses. Investors in the Foss Place development in York made annualised returns of between 8.5% and 22.5% in just eight months – all within a sensible Loan to Value range of 58% – 75%. 

Like stocks and shares, you don’t have to have saved or borrowed huge sums to get started – you can participate in a building development scheme from just £5000.

And whilst your loan investment is as solid as the houses being built, it’s also more liquid. You can invest in a CapitalStackers scheme almost as quickly as you can buy shares (with the assurance that the due diligence has already been done for you) and if you want to free up your cash, you can sell part or all of your investment on their secondary market.

Although investing in Buy-To-Let is verboten for pension schemes, if you have a SSAS (or access to one) CapitalStackers gives you a route to invest in the same asset class by lending on residential property developments and take your gains free of tax.

But there’s one important advantage that investing through CapitalStackers has over the Stock Market, and it’s this: when you buy shares, you bear all the risk. If they drop in value, your capital gets burnt. There’s no firewall, no cushion, no contingency.

However, with CapitalStackers, even the highest risk layer is cushioned by the developer’s own equity and profit, and you get to choose yourself the level of risk you want to take and the corresponding rate of return.

All of which points to a very healthy alternative to both BTL and the markets. As Warren Buffet once said, “If you can’t invest in the stock market for ten years, don’t invest in it for ten minutes”, and of course, it’s difficult to make any money out of rental properties in the short term. But CapitalStackers can bring you attractive, typically double digit, returns in as little as 6-24 months. In short, as long as it takes the developer to finish a building.

Now, isn’t that worth considering?


CapitalStackers is authorised and regulated by the FCA. Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other peer to peer lending platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.

A new development in Yorkshire could net you up to 17% return from a minimum investment of £5,000.Aerial View

CapitalStackers is inviting crowdfunding loans to help launch a development of 11 homes along with the purchase of additional land with detailed planning permission for a further 11 houses in a popular location.

Dacre Banks is an English village in the Yorkshire Dales, with the archetypal features of a cricket green, a popular pub, traditional shop and church, plus the added boon of a medical centre.

Homes tend to be highly sought after in this Area of Outstanding Natural Beauty set amid stunning moorland scenery and a tapestry of lush green meadows – just 11 miles from Harrogate and easily commutable from Leeds. Furthermore, historic planning restrictions and a shortage of new build properties have created a healthy build-up of demand.

InfogramGregory Property Group, very experienced developers operating since 1985, have created a scheme with broad appeal – a selection of 2, 3 & 4 bedroom houses (including 5 ìaffordableî homes – two available in the first phase), designed to attract a diverse mix of young professionals, families and older downsizers lured by rural village life, and commuters to Leeds and Harrogate. The houses will sell for between £249,950 and £375,000 (although sales agents have advised that prices may be 5% higher) with a total value for the 11 homes in Phase 1 assessed at £2,794,000 and the whole development at £3,858,584.

Senior funding of £2,340,000 has been secured from Hampshire Bank Trust, so CapitalStackers investors are invited to fill the balance of £504,000, in loans of £5,000 upwards, for returns of between 12.65% and 17.18% for a Loan to Value range of 65% to 73%.

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CapitalStackers is authorised and regulated by the FCA. Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other peer to peer lending platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.