8 Feb 2023 – Excited to be featured in The Evening Standard!
A new scheme launching today is planning to revolutionise the home-buying market, potentially ending the need for mortgages altogether. Through its crowdfunding platform, Allbricks lets buyers purchase a home by crowdfunding for investors to buy “bricks” — essentially shares — in the property, then paying those investors rent while they gradually buy the “bricks” back.
The buyer chooses a property on the open market, which is then valued by a RICs-accredited surveyor and Allbricks use this and local market conditions to decide how many “bricks” are needed to make the price of a single brick affordable (this tends to be about £100 a brick). As an example, a two-bedroom, £685,000 property in Shoreditch has 6,850 bricks, each costing £112.18.
After putting down a deposit, the buyer can then crowdfund for investors to buy the remaining “bricks”. If this process is successful, the buyer then pays the investors rent on those bricks with a regular chance to buy a proportion of them back.
Allbricks CEO Shahram Shaida says: “Home buyers can choose the home they want to crowdfund for and aren’t limited to properties below £500,000, new builds or leasehold. As there’s no mortgage and no debt, purchasing power is based on what they could comfortably afford to rent rather than mortgage-based income multipliers.”
The minimum deposit a potential homeowner needs to put down is one per cent of the property purchase price (or £10,000, whichever is higher). They need to be a UK resident, pay tax in the UK and use the property as their main residence, but it doesn’t matter if they are a first-time buyer or not. Allbricks will run standard affordability checks on the buyer to ensure that they are able to pay the rent, and once these have been completed, the buyer is free to choose their property and get their offer accepted.
Properties need to have a market rent of at least £1,500 a month, an EPC of D or above, not be a listed building or require any major work costing more than £5,000. At the moment, the scheme is only available for freehold properties in Greater London, but it’s hoped that it will roll out through England soon…..
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