For The Bulls and Bears of the Property Markets
‘Bid’ For Shares On The World’s First Stock Exchange For Residential Property
- Property Partner is set to launch a new ‘bidding engine’ for investors to trade shares in residential properties, boosting liquidity throughout economic cycles
- Investors can see prices listed, prices people are willing to pay, and what others have recently paid, helping them take their view on the market – whether bullish or bearish
- The new feature sets Property Partner even further apart from traditional commercial property property funds such as Aviva, M&G, Henderson Investments and Standard Life – many of which had to be suspended (while active trading continued on Property Partner)
London, 8 August 2016 – The UK’s leading residential property crowdfunding platform, Property Partner, is launching a new bidding engine, allowing investors to place orders for shares in residential property on its online ‘resale’ market. The aim is to make trading easier and more liquid by encouraging different investment personalities to express themselves. Official launch is planned for early September, allowing time to trial with a small group of dedicated users, and make improvements.
Acting as a residential property stock exchange, Property Partner enables anyone to buy shares in individual or multiple properties for as much or as little as they like – at the click of a button. Investors are currently able to list shares at any time, at a price of their choice, to trade those shares with others on the resale market.
The new bidding engine will make this even simpler by allowing investors to see prices listed, prices people are willing to pay, and what others have recently paid for that property on the unique secondary exchange. It works like any other bidding function. Users will be able to place a bid order as well as a sell order. If prices cross the same range, the trade occurs. Users can also see a 30 day trading history, as well as any outstanding orders that have yet to match. The feature is expected to improve liquidity throughout economic cycles by helping investors understand the prices at which shares are trading, and allowing them to compare current market sentiment with the official valuation from an RICS Chartered Surveyor.
Demand for such a feature had existed for a while. Property Partner has a community of highly-engaged users, some of whom had scripted their own bidding functions already. One user called Pavel Reich, a software developer in finance, had written a script that would send live updates to his watch:
“Once, I was cycling home from work when my pebble watch buzzed, telling me that my algobot had bought shares in a Whitechapel property at a good price – so I pulled over, bought more shares manually, and carried on my commute. I made £100 from this trade! There are often great deals to be found on the Resale market, so I’m glad that Property Partner is introducing this bidding feature to make property investment even simpler.”
Pavel is an active trader, but a larger proportion of Property Partner users prefer to hold – an indication that they see property as a longer term investment. Despite the EU Referendum and market uncertainty, most Property Partner investors have held onto their shares, with only 0.33% of total investments being listed at a discount to the original price within 11 days of the Brexit vote. Within 14 days, opportunistic investors had snapped up more than 99.32% of these investment offers – even without the new bidding function.
By contrast, property funds (mostly commercial) such as Aviva, M&G, Henderson Investments and Standard Life have had trading suspended, highlighting the marked difference with Property Partner, which is emerging as a robust, fully functioning secondary market.
Historically, residential property is not as volatile as other investments, such as commercial property, or stocks and shares. In fact, the UK residential property market has seen no five-year period with negative total returns since 1973*. This works with Property Partner’s five-yearly exit protection scheme, when investors are offered the chance to exit at market value.
The bidding feature is the latest innovation from Property Partner. The residential property ‘stock exchange’ launched to the public in January 2015, and now has over 8,000 investors, who have invested more than £35m across 234 properties in the UK.
Dan Gandesha, CEO of property crowdfunding platform Property Partner, comments:
“We built Property Partner to make it easy for anyone to invest in property. A bidding function holds true to that vision by improving price discovery and liquidity – allowing users to enter and exit the market at the click of a button, with confidence. We also believe at Property Partner that we can make the property market fairer for everyone – and that means giving a voice to both buyers and sellers.
“Previously, our marketplace was more like an estate agent’s shop window than a trading floor. A marketplace should be driven by an expression of intention from both sides, and not just the sellers. After all, whatever the official valuation, a property is only worth what people are willing to pay for it.
“An exchange is a product for any market situation. Property Partner allows users the freedom to take their view on the market, and this bidding feature will allow the ‘bulls’ and the ‘bears’ of the property market to interact seamlessly for the first time.”