6 Month Results
The results for the first 6 months of investing through Bricklane are in, and they are as follows –
Now there needs to be some background to these figures for them to make a little more sense. The Expected ROI is taken from a few published figures from 3rd parties and I levelled 5.00 % as a sensible average target. The fact is Bricklane don’t make a big deal of an expected return, partly because regulations require at least 2 years of track record to advertise a return as a figure (which Bricklane are not quite there), but the main reason being Bricklane is very different to a traditional P2P investment platform ( in-fact it actually classifies as an ISA) . It’s easy to calculate an expected return based on the given percentage for each loan part, but with Bricklane you are investing in a share of an overall property portfolio, plus a share of the rental dividend pro rata.
So although a near 90% disparity between ‘Expected ROI’ and ‘Actual ROI’ looks worrying, it’s not as bad as a seems. Bricklane charge a 2% deposit fee (ouch) on balances under £25’000 (1% for over £25’000), plus a 0.85% annual servicing fee. This meant it took a couple of weeks short of 6 months to realise a profit. If that trend continues for the next 6 months (without anymore deposits) that would result in an annual return of just north of 2%, based on portfolio growth. That is only one revenue stream though, the second being a share of rental income paid every 6 months.
At the time of writing this blog I have now received my first share of rental income dividend, however because it fell just behind the 6 months cut off for compiling these figures (it will be included in the figures for month 7) I didn’t want to distort the results for 6 months. I’ve give you a clue though, 5.00% annual ROI is looking fair right now.
To conclude, I must admit I’ve been lukewarm about Bricklane for months, thinking a 2.00% annual ROI (- 1.00% when factoring in inflation) is hardly call for cracking out the party poppers. Now with the rental income dividend paid, it starting to look a little more rosy. What i have always liked about Bricklane though is firstly it’s heavy weight backing ( backed by Zoopla ), secondly you are invested in owned bricks and mortar, not a debt transaction that can default like most P2P property platforms, finally there are no withdrawal transactions or secondary market queuing. So once you have paid the deposit you money is theoretically accessible at any time.
I am considering increasing my investment in Bricklane but it means writing off most of this years gains (at the cost of a 2% deposit charge) for higher gains later on down the line, which of course are never guaranteed.