Bricklane: My Review of This Property Investment Platform
Please be aware that this is a historical post. Bricklane is now closed to new investors and is winding down. Please see the comments below for the latest updates about it.
Today I am looking at another property investment platform, Bricklane.
Unlike Kuflink and Ratesetter, both of which I have discussed previously on this blog, Bricklane is not a platform for peer-to-peer loans. Neither does it arrange crowdfunded investments in specific properties like Crowdlords and Property Partner.
Bricklane is structured as a Real Estate Investment Trust, or REIT for short. For those who don’t know, REITs are property funds that use investors’ money to buy (and manage) property and provide returns in the form of rental income plus capital appreciation.
In order to qualify as a REIT in the UK, companies have to meet certain requirements. The most important are as follows:
- At least 75% of their profits must come from property rental.
- At least 75% of the company’s assets must be involved in the property rental business.
- They must pay out 90% of their rental income to investors.
In exchange for operating within these rules – and to encourage investment in UK real estate – REITs are not required to pay corporation or capital gains tax on their property investments. That helps make REITs profitable for the companies running them, and is how they are able to generate attractive returns for investors.
Normally rental income from REITs is treated as taxable income and taxed at your highest marginal rate. However, if you invest through an ISA or SIPP (Self Invested Personal Pension) no tax is due. You therefore get the best of both worlds – your money isn’t subject to taxation while invested in the REIT, and when it comes back to you in the form of income distributions and profits on sales of shares, you don’t have to pay tax on these either.
Table of Contents
Types of Investment
You can invest in Bricklane as a stocks and shares ISA or a SIPP, or failing that in a standard investment account, where you will be liable for tax.
To maximize the benefits from investing in a REIT, I highly recommend going down the SIPP or ISA route, if you haven’t already used up this year’s allowance. As a reminder, everyone has a £20,000 annual ISA allowance (for 2019/20) and you are also only allowed to invest in one cash ISA, one stocks and shares ISA and one Innovative Finance ISA (IFISA) in any one tax year. I invested in a stocks and shares ISA with Bricklane myself.
Bricklane has two property portfolios you can invest in. These are Regional Capitals, which includes properties in Birmingham, Manchester and Leeds. and London, with a portfolio of properties in the capital. The Regional Capitals portfolio has generated a return of 19.3% since it was launched in September 2016 and the London portfolio 8.9% since its launch in July 2017 (figures from the Bricklane website).
As a Bricklane investor, you can choose to invest in either or both portfolios, in any proportion you choose. I opted to put all my money into Regional Capitals, as I believe this is where the biggest growth potential lies. In addition, rental income in this portfolio is higher, and I am also concerned about the possible impact of Brexit on London. You might see this differently, of course!
Bricklane Pros and Cons
Based on my experiences so far – and some online research – here is my list of pros and cons for the Bricklane property investment platform.
Pros
1. Fast, easy sign-up.
2. Well-designed, intuitive website.
3. Low minimum investment of £100.
4. Bricklane take care of all the work involved in buying and managing properties. You just choose which portfolio/s to invest in.
5. REIT structure offers significant tax advantages.
6. Tax-free ISA and SIPP options are available.
7. Possibility to access your money at any time (though this does depend on another investor being willing to buy your shares).
8. Customer service (in my experience anyway) is fast, friendly and helpful.
9. Charges are reasonable, comprising an initial 2% fee (though see my comment below on how you may be able to offset this) and 0.85% annual management fee.
10. Potential to profit through both capital appreciation and rental income.
11. Rental income is paid into your account every three months. You can either withdraw it or reinvest it to compound your returns.
12. Up to £1,500 cashback is available for new investors of £5,000 or more via my referral link (see below).
Cons
1. No detailed information provided about the properties your money is invested in.
2. Can’t invest in an ISA if you have already put money into another stocks and shares ISA this year.
3. 20% tax deduction from rental income at source if you don’t invest via a SIPP or ISA (and additional liability if you are a higher rate taxpayer).
4. Minimum £10,000 investment for a SIPP.
5. Returns over the last few months have been disappointing (see below)
6. No absolute guarantee you will be able to sell your shares when the time comes.
My Experiences
I put £5,000 into a Bricklane Stocks and Shares ISA in October 2018. As mentioned above, I chose to invest in the Regional Capitals rather than the London portfolio. The graph below – taken from my member’s page – shows the earnings generated since I opened my account.
As you will see, initially my investment performed pretty well. In the first nine months I made about £150, which equates to an annual interest rate of 4% (tax-free). That’s not spectacular, but it still beats most bank and building society accounts by a considerable margin. It is similar to the top rate currently on offer with P2P platform RateSetter in their Max account, although in their case you have to pay a fee equivalent to 90 days’ interest if you wish to withdraw. There is no withdrawal fee with Bricklane.
Since July/August 2019, however, returns have diminished considerably. My earnings between August 2019 and February 2020 were only just over £7, which is clearly a very low percentage rate. Of course, a large part of this is down to the depressed state of the property market caused by uncertainty over Brexit. I am hoping that now this is definitely happening – for better or for worse – my investment will get back on an upward trajectory again. Although recent results have been disappointing, at least the overall value of my portfolio hasn’t gone down (which has happened with some of my other property-related investments).
One other thing I should mention is that in October 2019 I withdrew £1,000 from my account to help fund a new central heating boiler after the old one packed in. This has therefore also reduced my returns a little. Although even if I still had the full £5,000 invested, earnings over the last few months would still have been nothing to write home about.
- I should add that the withdrawal in question proved straightforward, although it wasn’t instant. I received the money in my bank account about a fortnight after putting in my request.
Conclusion
Clearly the performance of my Bricklane portfolio since last August has been disappointing, though overall I am still better off than I would have been if I had kept my money in a bank or building society.
I am hoping that things will start to improve in the property markets now that the Brexit issue has been resolved. There are some signs of this, although it remains to be seen whether the recovery in property prices will be sustained. For the time being, then, I am sticking with what I have in Bricklane, though I am not planning to top up my investment with them currently.
More generally, my experiences with Bricklane have been good. The sign-up process was fast and simple, and my £125 referral bonus (see below) was credited to my account instantly, completely offsetting (with a bit to spare) the initial 2% charge.
I also like the fact that any investment with Bricklane is automatically diversified across a range of properties, thus reducing volatility and risk. By contrast, with many P2P loan and property crowdfunding platforms, you invest in one loan or property at a time.
It’s also reassuring that you can ask to withdraw your money at any time – this can be an issue with property crowdfunding platforms in particular. As mentioned earlier, this does depend on someone else being willing to buy your shares, but Bricklane say that to date there hasn’t been a problem for anyone wanting to sell. As I said above, I had no issues when I wanted to release £1,000 from my own investment with them.
It is important to note that this is an investment rather than a savings account, and it does not therefore enjoy the same level of protection as bank and building society savings, which are covered (up to £85,000) by the Financial Services Compensation Scheme (FSCS).
Clearly, no-one should put all their spare cash into Bricklane (or any other investment platform). Nonetheless, in my view it is worth considering as part of a diversified portfolio. Not only are the rates of return (other than the last few months) higher than those offered by most banks and building societies, they are less affected than shares by ups and downs in the stock market. Property investments aren’t a way of hedging your equity-based investments directly, but they do help spread the risk.
In addition, the tax treatment of REITs make them a highly tax-efficient investment, especially if you can invest in the form of a SIPP or an ISA.
Welcome Offer
As an existing Bricklane investor, I can offer a special cashback deal for anyone signing up and investing on the platform via my link. If you click through this special invitation link, sign up and invest a minimum of £5,000, you will receive £125 in cashback (and I will get £100). With a £5,000 investment this bonus will cover your initial 2% charge and still leave you £25 in profit 🙂
If you invest more, you will get even more cashback, as follows:
Over £10,000 – £250
Over £20,000 – £500
Over £50,000 – £800
Over £100,000 – £1,500
Not only that, once you are an investor with Bricklane, even if you only start with £100, you will be able to offer the same cashback bonus to your friends and relatives and earn commission yourself as well. There is no limit to the number of people you can introduce through this scheme.
Obviously, this is a generous promotional offer by Bricklane and I assume it won’t be available forever. If you want to take advantage, therefore, don’t wait too long. I will remove this information if/when I hear the offer is no longer valid.
If you have any comments or questions about this Bricklane review, as always, please do leave them below.
Disclosure: this post includes affiliate links. If you click through and make an investment at the website in question, I may receive a commission for introducing you. This has no effect on the terms or benefits you will receive. Please note also that I am not a professional financial adviser. You should do your own ‘due diligence’ before making any investment, and seek professional advice from a qualified financial adviser if in any doubt how best to proceed.
Note: This is a fully revised and updated version of my original Bricklane review from October 2018
UPDATE 15 March 2020: Having said that my earnings from my Bricklane ISA over the last 6-8 months were disappointing, since the start of February they have shot up by over 100% (see below).
This doesn’t exactly cancel out the recent falls in my equity-based investments due to the coronavirus, but it does demonstrate the value of having a well-diversified portfolio. And I am obviously feeling more positive about Bricklane as an investment platform now 🙂
One other thing to note is that until the end of April 2020 Bricklane are waiving all investment fees for both new and existing investors. Visit the Bricklane website for more information.
October 25, 2019 @ 11:08 am
Cash back may ring an alarm bell ,but why would one not just buy a listed reit i was thinking if you have the stomach for it.
regards lawrence
October 25, 2019 @ 11:23 am
Thanks for your comment. You could certainly invest in another REIT if you prefer. Bricklane make it super easy to invest, though, and you can also maximise the tax benefits by investing in an ISA or a SIPP.
February 17, 2020 @ 2:49 pm
I hadn’t heard of them before your post and even though I’m not really in the ‘market’ for property investment, it’s interesting to learn more about how it works. It’s hard weighing up those pros and cons, factoring in the possible benefit in future that’s unknown; the instant £125 cashback is tempting!
Fab review, Nick.
Caz x
February 17, 2020 @ 3:13 pm
Thanks, Caz. Yes, the cashback offer is enticing, although recent returns on my investment have been a bit disappointing. Obviously, from an investment angle I am hoping that after a lacklustre few months, the property markets start to recover now. We shall see, I guess 🙂
July 3, 2020 @ 7:38 pm
Thanks for the great review.
July 10, 2020 @ 10:05 am
Glad you liked it 🙂
August 3, 2020 @ 12:00 am
Nice write up.
August 3, 2020 @ 3:04 pm
Thank you 🙂
August 15, 2020 @ 6:22 pm
Nice review, and it is a great concept especially with the ISA wrapper. I invested in the london and the regional products in 2017. The regional has made a small profit (3.4% over a 5 year average, though the earnings have reduced over the last few months which seems odd, where have the earnings gone that were paid into my account?) and the london product has lost money (though their webpage states a 1.6% income over 5 years, maybe a 1.6% loss?). In hindsight the mattress would have been a better investment. A closer look at their finances would be interesting to see where all the money disappears to as with such a broad portfolio they should be making good money not losing it. I guess someone is making a profit but it’s not me!
August 15, 2020 @ 8:25 pm
Many thanks, John. My experience has been similar to yours, though I am only invested in the regional portfolio. As my post says, the value of my holding shot up in March, but since then it has been going down again. I am still in profit, but only by about 1.5% over the last two years. It’s clearly disappointing, but you do need to remember that property prices have been hit hard by the Covid crisis, and that affects the value/price of the REIT. Earnings from rent are paid quarterly and you can either withdraw them as cash or have them automatically reinvested (which is what I do). If property prices start rising again – and I am fairly optimistic this will happen in the next few months – the value of the Bricklane REIT will go up. So I intend to continue to hold rather than selling up. I know it’s not much consolation at this time, but my other equity-based investments have generally fared worse than my Bricklane ISA!
February 19, 2021 @ 7:41 pm
Hi Nick,
This was a well-written review of the Bricklane REIT! I just recently found out about this property investment firm and i am dabbling with the idea of investing £100 to begin with.
I have read the reviews on Trust Pilot and the majority of negative reviews from investors revolve around two main issues: low returns and the difficulty a lot of investors have faced when trying to withdraw their money from their Bricklane accounts.
It is now February 2021 and i would love to know what your recent returns have been like as this pandemic drags on, and whether you have any regrets investing in this REIT?
February 22, 2021 @ 10:23 am
Hi Tom. Thanks for commenting. This is an old post and obviously needs updating now, so thanks for reminding me! Since I last updated it, the value of my Bricklane investment has plunged from around £5000 to £4000. This is partly due to the pandemic, but mainly to the fact that around 40% of properties in the Regional Capitals fund (in which I am invested) have issues with cladding which may need to be replaced. This is obviously costly, and Bricklane have had to set aside substantial sums of money for potential remedial work. That is reflected in the current REIT valuation. On the positive side, it looks likely that the government will be picking up the tab for at least some of this work, though where that leaves property owners such as Bricklane and its investors still isn’t entirely clear. So I would say that currently the price of Bricklane is at a low ebb and will almost certainly go up if the government confirms it will fund the remedial work itself. So to that extent it’s a buying opportunity right now, but a risky one!
As I always have to say, I am not a qualified independent financial adviser and cannot give personal financial advice. And whether Bricklane is right for you will depend on many factors, including your reasons for investing, what other savings and investments you have already, your investment timeframe, your attitude to risk, and so on. If you are in any doubt, you should speak to an independent financial adviser before proceeding, bearing in mind that all investments carry a risk of loss.
What I can say is that starting cautiously is sensible, and with an initial proposed investment of £100 you obviously aren’t risking very much. As regards withdrawing, about 18 months ago (pre-pandemic, obviously) I withdrew £1,000 from my Bricklane account to help finance a new boiler. I received the money without any problem within a week. Obviously I don’t know if withdrawals are still that quick and easy, but it might provide some reassurance anyway. Good luck whatever you decide, though 🙂
April 25, 2023 @ 11:07 pm
Hi Nick, It would be good to get an update, did you manage to get out while the ship was sinking?
Following the cladding announcements, not being able to fulfil withdrawals and ultimately deciding to wind down, it’s panning out to be an expensive lesson. Expecting anything back without a substantial loss is probably unlikely, but was curious how you were fairing and if you had a different outlook?
April 26, 2023 @ 4:43 pm
Thanks for the comment. I withdrew £1000 before it all went pear-shaped, but still have £4000 invested, with £3000 in the Regional Capitals fund and £1000 in the London fund. I get regular updates from Bricklane by email about the winding up process. Last I heard all the London properties had been sold and hopefully a distribution will be made quite soon. It looks as if the Regional Capitals fund will take longer to sort out though.
I honestly don’t know how much I will eventually get back. If it’s anything close to what I put in, I shall be delighted. Obviously it’s been a chastening experience, but I don’t think anyone could reasonably have predicted the tragic Grenfell Tower fire and the consequences this would have for investors.
April 27, 2023 @ 2:31 pm
Thanks Nick, appreciate your response. Agreed, there’s some solace in making sure such a tragedy doesn’t recur.
I’m just on the Regional fund, so probably a couple years away from seeing anything returned.
I’d be curious to read about what kind of return you end up with when they distribute the London fund. Fingers crossed not too low.
April 27, 2023 @ 2:36 pm
No worries. I will try to remember to put the info in a comment here.
October 11, 2023 @ 8:44 am
Hi Nick, I came across your blog looking for information on Bricklane Investment Services. Like you, I have investments with Nutmeg and Bricklane. With Bricklane I have invested nearly £8K since 2018, distributed between the London and the Regional Capital. After losses, my funds are now just over £6K.
I was wondering whether you got any money back from the London Capital, as they should be making a distribution following the latest investment update (August 2023). I haven’t got anything yet, haven’t been contacted and I’m not getting any replies or even acknowledgments of my enquiries.
October 11, 2023 @ 10:47 am
Hi Fausto. No, nothing yet. But I did get an email a couple of weeks ago saying they would soon be making repayments to investors in the London fund and asking how I wanted the money to be paid (ISA transfer or bank account). I will update here again when I receive my money (and how much!). Hope that helps.
October 30, 2023 @ 1:50 pm
Just checked my bank account and around £880 of my £1000 investment in the London fund has been returned to me. No other notification received.
November 4, 2023 @ 8:07 am
Thanks for the update, Nick.
Sadly, Bricklane is not responding to my emails and I haven’t got anything back yet. Now have a complaint open with the principal firm Gallium Fund Solutions, as Bricklane is not registered anymore with the FCA.
November 4, 2023 @ 9:11 am
Really sorry to hear this. It does sound as though you have been badly treated by Bricklane. I do hope you’re able to get your money (or some of it) returned to you soon.
November 8, 2023 @ 8:42 pm
I couldn’t sign up, there’s no option for signing up, what to do ? Does this platform available on Google Play store??
November 10, 2023 @ 10:20 am
Thanks for the query. Bricklane is now closed to new investors and is winding down. Please see the other comments here.