Bricklane – 18 Month Results

18 Month Results (Regional Capitals Fund only)

The first 18 Month Results for investing through the Bricklane platform are as follows –

Expected ROI (Annualised) 5.00%
Actual ROI (Annualised) 2.39%

Following on from the previous results I have utilised the same method to set the ‘Expected ROI’ at 5.00%. The ‘Actual ROI’ comes in at 2.39%. Right, Bricklane is not technically P2P in the traditional definition, it is in fact a Real Estate Investment Trust (REIT), which is essentially an equity holding in a ‘bricks & mortar’ property fund. Where as P2P is traditionally a purchase and holding of debt, for a return. Bricklane also charge a sizeable deposit fee of 2.00% (1.00% for deposits over £20,000). My Bricklane holdings are still in a growth phase, meaning I am increasing my holdings, but with a 2.00% deposit fee I’m actually reducing my returns in the short term.

So my strategy has been to target an inflation level return (2.40%) before making a further deposit. Now for the clearer picture, if I remove the deposit fee then calculate the return, then anualise it (return /18 x 12) it comes out at 2.45% which can hardly be described as attractive. Bricklane also charge a 0.85% annual management fee further reducing returns. The UK property market has cooled significantly in recent months over the uncertainties around Brexit. This has resulted in a significant reduction in the bi-monthly property value appreciation payment, although it has not fallen to a negative so far overall (the share price has dropped though in the most recent calculation, for only the second time in the funds history, indicating a devaluation in some properties). The bi-annual rental dividend has also reduced over the last 3 payments despite my holdings increasing and this is a worrying trend suggesting there have been difficulties in generating the expected rental income.

Company and Fund Information

The London Fund 

The London Fund is now made up of 11 properties, 3 of which are undergoing a due diligence process. The combine value of the properties in the London Fund (including those in DD) is £5,058,000.00 with average property value of £459,818.18.

The Regional Capitals Fund

The Regional Capitals Fund is now made up of 67 properties, 16 of which are undergoing due diligence. The combine value of the properties in the Regional Capitals Fund (including those in DD) is £12,000,500.00 with an average property value of £179,111.94.

Both funds have continued to grow over the 6 month period although I’m not in possession of full figures for the previous 6 month period so can’t provide accurate, comparable statistics.

Conclusion

I take a slightly different approach with Bricklane as I view it as a very long term investment prospect, protentaily over 20 years. As I’m considering using it as part of a retirement fund. Even so I can’t deny the latest figures are disappointing, but we live in exceptional times. The Brexit worries that are cooling the UK property market should hopefully pass and I do believe any lost gains now will be recouped fairly quickly once the future becomes a little clearer. So Bricklane will remain within my portfolio but if I’m being entirely frank this is the first period I have entertained the prospect of dropping Bricklane and what alternatives I could source to replace it.

Referral Link for Bricklane

This link provides a referral bonus of £225 when a new customer signs up and invests £5000 using the link (T&C’s apply). The bonus is split £125 to the new customer and £100 to Proptechfish.com Any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated.

 

Bricklane – 12 Month Results

12 Month Results

The first year results for investing through Bricklane are as follows –

Expected ROI (Annualised) 5.00%
Actual ROI (Annualised) 1.51%

It’s a little difficult to set an Expected ROI with Bricklane as it has a 2.00% deposit fee, meaning if you deposit a large volume in sort time you will end up with negative return so I have taken 5.00% Expected ROI form their own marketing material.

My Actual ROI is 1.51% for the year for exactly the reason explained above, this is for the Regional Capital Fund only as I do not participate in the London Fund.  The underlying growth (excluding deposit fee) is actually around the 7.00% mark. Of course you can argue Bricklane is not strictly P2P as it’s actually an REIT but I value its place for diversification within my portfolio and it dose meet several of the traditional P2P definitions.

It has been a good year for Bricklane with sustained growth in both rental income and property prices, with properties being added to fund at a reasonable pace : Regional Fund Property value c£9,000,000, London Fund Property value c£4,500,000.  However I’ll be closing out 2018 and going in to 2019 with moderated expectations as many in the property industry are predicting minimal growth or even a small retraction in house prices in 2019.

In conclusion I will continue to add to funds to Bricklane over the next year with a degree of caution and hope for an improved outcome over expectations. I view Bricklane as a longer term investment, over ten years, so sort term returns at this stage are less relevant that other P2P platforms.

Referral Link for Bricklane

This link provides a referral bonus of £225 when a new customer signs up and invests £5000 using the link (T&C’s apply). The bonus is split £125 to the new customer and £100 to Proptechfish.com Any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated.

Bricklane – 6 Month Results

6 Month Results

The results for the first 6 months of investing through Bricklane are in, and they are as follows –

Expected ROI 5.00%
Actual ROI 0.54%

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.

Referral Link for Bricklane

This link provides a referral bonus of £225 when a new customer signs up and invests £5000 using the link (T&C’s apply). The bonus is split £125 to the new customer and £100 to Proptechfish.com Any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated.

Bricklane – An Introduction

Introduction

Bricklane is an online ISA lending platform exclusively operating in the UK property market. Established in 2014 Bricklane aims to create ‘ a fairer property market’. Bricklane offers a unique product in this area as it offers a combination of 2 financial products in one. You earn a return on investment on both portfolio growth and rental income. Bricklane is partnered with Zoopla (the UK’s biggest estate agent) so is considered to be well backed and relatively safe.

There are two options on where to deposit your funds in Bricklane at this time. You can either deposit in to the ‘London Fund’ or the ‘Regional Capital’s Fund’. The minimum deposit for Bricklane is £100 but there is a 2% deposit levy, which I must say is a little on the high side. With the addition of an 0.85% annual account fee.

Payments can be made by debit card (usually instant) or bank transfer (2-3 working days. You can either make a one-off payment or set up a monthly payment. Bricklane is also an ISA account so the balance is tax-free up to £20’000 in a financial year, for UK residents.

Withdrawals can be made from the entire account balance at any time providing there is demand to buy your investments,  but it can take a couple of days to process.

 

The Account Page

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The Bricklane Account Summary Page

Summary – shows details of both funds combined

London – shows details of the London fund. Scroll down the page to view specific properties in the fund

Regional Capitals – shows details of the Regional Capital fund. Scroll down the page to view specific properties in the fund

In your account – shows the total balance of your Bricklane account (notice from a £100 deposit its taken away the 2% deposit charge).

Earnings – Shows your total earnings to date across both funds.

The earnings graph – Shows your earnings in graph form for each week.

Referral Link for Bricklane

This link provides a referral bonus of £225 when a new customer signs up and invests £5000 using the link (T&C’s apply). The bonus is split £125 to the new customer and £100 to Proptechfish.com, any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated.