Kuflink: My Review of this P2P Property Investment Platform

Nick Making Money, Saving Money, Investing reviews, property, crowdfunding 11 Comments

Today I am looking at P2P property investment platform Kuflink.

I have been investing with Kuflink for five years now, so this is a fully updated repost of my original review.

What is Kuflink?

Kuflink is an online platform offering opportunities to invest in loans secured against property. These loans are typically made to developers who require short- to medium-term bridging finance, e.g. to complete a major property renovation project, before refinancing with a commercial mortgage.

Kuflink offer three types of investment, as follows:

1. Select-Invest (individual loans)
2. Auto-Invest
3. Tax-free IFISA (Innovative Finance ISA)

Auto Invest and IFISAs both automatically invest your money across a number of loans and pay a fixed interest rate, typically between 7 and 9%. You can choose a 1-year, 2-year or 3-year term, and interest is paid annually (it is automatically reinvested at the end of each year with the two-year and three-year products). The Auto-Invest product is basically the same as the IFISA, but without the tax-free wrapper.

• At one time only the Auto-Invest option was available for IFISAs, but nowadays you can choose your own investments if you prefer. The great majority of Self-Select loans on the Kuflink platform are IFISA-eligible. If you check out the Self-Select listings on the Kuflink website (see image below), this will tell you whether any particular loan is IFISA-eligible or not.

Individual Select-Invest loans pay interest rates varying between about 6 and 7.2%, depending largely on the LTV of the loan (loan to value, a measure of how secure the loan would be in the event of a default). The higher the LTV, the riskier the loan, and – other things being equal – the higher the interest rate paid in consequence. You can see a screen capture below of three Select-Invest loans available on the platform at the time of writing.

As a reasonably experienced P2P investor, I put my money into Select-Invest loans. These typically have a duration of six months to a year and (as mentioned above) pay interest from around 6 to 7.20 percent. That obviously isn’t as much as some P2P property platforms (e.g. BLEND), but I think it represents a fair balance between risk and reward. Kuflink also invest in every loan themselves up to 5% of the value of each loan – so, as the expression goes, they have skin in the game.

My Kuflink Review

I found signing up with Kuflink a quick and easy process. They do the obligatory money-laundering checks, but in my case anyway this was all done electronically behind the scenes. I uploaded a copy of my passport and was approved almost immediately. I started by depositing £500, but you can start with as little as £100 if you like.

Initially I put my money into a 12-month loan paying 7% annual interest. One good feature I didn’t grasp initially is that with Select-Invest loans interest is paid monthly. So once a month I receive interest payments on all the loans I am currently invested in. This is paid into a wallet, from which you can either withdraw to your bank account or reinvest.

• Kuflink recently introduced an option to have monthly loan repayments automatically reinvested rather than paid into your account as cash. This effectively boosts your interest rate by the power of compounding, as you then receive interest on the reinvested payments as well. Currently this option is available for most, but not all, loans on the platform. You can see which of your loans compounding is available for via your Kuflink dashboard.

I have continued to invest in Kuflink, and have also reinvested in new loans when the original ones were paid off. Another good feature is that money invested in a loan but not yet released to the borrower attracts interest which is paid as cashback once the loan has gone live.

There have been no defaults so far on any of my loans, and Kuflink say on their website that to date nobody has lost a penny on their platform. I have experienced short delays with loans being repaid, but in such cases you continue to earn interest, of course.

Secondary Market

A new feature on Kuflink I like is the Marketplace (secondary market). Here you can buy loan parts from other investors who want to sell up early. You can also put up for sale any (or all) of your own loan parts.

The number of loan parts listed in the Marketplace went up in the early months of the pandemic, as many investors understandably wanted (or needed) to access their cash. This created short-term buying opportunities which I was happy to take advantage of. Loan parts offered via the Marketplace typically have only a few months to run, so you can expect to get your capital back quickly (and can then reinvest it if you wish). Only loans in good standing with monthly repayments up to date may be listed on the  Marketplace, so that offers some reassurance against default – though of course it is by no means a guarantee.

In recent months the number of loan parts listed on the Marketplace has reduced considerably. And those that are tend to be snapped up quickly. As a would-be investor this is slightly disappointing, but it does indicate that people are keen to take advantage of the opportunities on offer. It also means that if you want (or need) to exit a loan early, accessing your money should be a quick and easy process.

Pros and Cons

Based on my experiences, here is my list of pros and cons for the Kuflink investment platform.

Pros

1. Easy sign-up process.

2. Low minimum investment.

3. All loans secured against property.

4. Choice of investments and approaches.

5. Manual and auto-invest options.

6. Kuflink invest in all loans themselves, so they have a strong incentive to ensure they are safe and secure.

7. They also cover the first 5% of losses on any loan before investors are affected (although this has never happened yet).

8. Money invested but not yet released to the borrower attracts interest which is paid as cashback once the loan has gone live.

9. In-depth information is provided on the website about all loans, so you can see exactly how your money will be used (and by whom).

10. There have been (according to Kuflink) no investor losses to date.

11. Customer service (in my experience anyway) is fast, friendly and helpful.

12. There is a 14-day cooling off period for new investors.

13. Marketplace (secondary market) for buying and selling loan parts.

14. No charges to investors lending on the primary market and only a 0.25% fee if you resell a loan part on the secondary market.

15. On most loans you can opt to reinvest monthly repayments to boost your net interest rate.

16. Tax-free IFISA option available.

Cons

1. Rates paid aren’t the highest in P2P lending.

2. Delays with some loans being repaid (although investors do earn extra interest if this happens).

3. No mobile app [UPDATE FEB 2023 – An app is now available.]

Conclusion

Overall, my experiences with Kuflink so far have been entirely positive and my investments have been generating the promised returns. I started cautiously with them, but have gradually built up the amount I have invested on the platform. Although – like all property P2P platforms – they were adversely affected by the pandemic, they appear to have come through it strongly, with new loans now being added almost daily.

As mentioned above, although Kuflink don’t pay the highest rates in P2P lending, I think the returns on offer are realistic and sustainable. The steady expansion of the platform seems to testify to this, as does the fact that they have received several industry awards. These include Best Alternative Business Funding Provider in the Business Moneyfacts Awards in both 2018 and 2019 and Best Service From an Alternative Funding Provider in 2020.

Kuflink are also highly rated on the independent TrustPilot website, with an average 4.6 out of 5 (‘Excellent’). At the time of writing 82% of reviewers award them the maximum five-star rating, which is among the highest figures I have seen for a financial services platform.

As with all P2P lending, your money does not enjoy the same level of protection as bank and building society accounts, which are covered (up to £85,000) by the Financial Services Compensation Scheme. Nonetheless, the rates of return on offer are significantly better than those from most financial institutions. And the fact that all loans are secured against bricks and mortar – and Kuflink themselves have cash invested in them – clearly offers some reassurance.

From my experience, Self-Select loans tend to fill up quickly. On the positive side, this shows investors have confidence in Kuflink and want to invest through the platform. On the minus side, it means there are typically no more than two or three new loans open for investment at any time.

Clearly, no-one should put all their spare cash into Kuflink (or any other P2P investment platform). Nonetheless, it is certainly worth considering as part of a diversified portfolio. Not only are the rates of return much higher than those offered by banks and building societies, they are relatively unaffected by ups and downs in the stock market. P2P loans aren’t a way of hedging your equity-based investments directly, but they do help spread the risk.

If you have any comments or questions about this review or Kuflink in general, as always, please do leave them below.

Disclosure: As stated above, I am an investor with Kuflink myself, and if you invest £500 or more via my link above I will receive a bonus for introducing you. Money is at risk. You should always do your own ‘due diligence’ before investing, and seek advice from a qualified financial adviser if in any doubt how best to proceed.

Assetz Exchange: My Review of This P2P Property Investment Platform

Nick Making Money, Saving Money, Investing reviews, property, crowdfunding 14 Comments

Today I’m looking at P2P property investment platform Assetz Exchange (launched in January 2019)..

As I have noted before on Pounds and Sense, I am something of an enthusiast for property investment (and specifically property crowdfunding). Among other things, I like the fact that you can make money from both rental income and capital growth. And investing in property can be a good way of spreading the risk when you have equity-based investments.

Of course, investing in property directly is costly and carries all the risk inherent in putting all your eggs in one basket. A major attraction of P2P property crowdfunding investment is that you can get started with much less money and build a diversified portfolio to help mitigate the risks.

In addition, if you invest this way you don’t have to deal with the day-to-day hassles of being a landlord, from finding tenants to repairing broken boilers. This is taken care of by the platform itself and/or their management company. You just have to sit back and – all being well – wait for the rental income and (hopefully) capital gains to materialize.

That said, there have been a few reversals in the P2P property sector over the last few months (see this recent post, for example). So I am now more concerned than ever to ensure that any investments I make in this category control risk as effectively as possible.

What Is Assetz Exchange?

As mentioned above, Assetz Exchange is a licensed P2P property investment platform. It is owned by well-known P2P lending platform Assetz Capital, but run quite separately from them. If you already have an account with Assetz Capital, you will have to register separately with Assetz Exchange.

Assetz Exchange aims to offer net yields to investors of between 5.2 and 7.2% per year. These are generally paid by institutional tenants through multi-year leases. All properties are unleveraged, providing additional security (and stability) for investors.

Assetz Exchange has some similarities with Property Partner, but they differ in some important ways. For one thing, many of the properties are rented out to charities (e.g. NACRO) or housing associations. These organizations generally sign longer contracts than private individuals. They don’t have voids (periods when the property is untenanted and producing no income). Neither are there any maintenance costs, as the organizations take responsibility for this themselves. And finally, these organizations are directly funded by the government, giving them a secure income stream.

Another area of specialism is show homes. Working with a national housebuilder, Avant Homes, Assetz Exchange purchases fully furnished show homes from multiple sites around the country. These are then leased back to the developer for fixed periods of up to five years to be used to help sell other plots. This eliminates potential void periods and avoids any maintenance costs. At the end of the leases, investors will be able to vote on whether to lease the houses to tenants or sell them to home-buyers on the open market.

Assetz Exchange also offers investors the chance to get involved with a new generation of modular eco-homes. This is already a popular approach to house-building in Europe and the United States. Assetz Exchange fund the acquisition and conversion of land into serviced plots, allowing buyers to then order a house to be built on that plot to their own specification. These modular-built eco-homes are sustainable and low energy. They are also typically quick to complete and have a lower impact on the environment.

Assetz Exchange do also buy and let some standard properties as well, offering investors the chance to further diversify their portfolios.

Signing Up

Before you can invest through Assetz Exchange, you will of course have to sign up on the platform. This is pretty straightforward. You just visit the Assetz Exchange website, read the information there, and click on Register in the top-right-hand corner.

You will then be required to enter your contact details and confirm which of four categories of investor you fall into. The options are as follows:

High Net Worth Investor – This includes individuals who have an annual income of £100,000 or more or net assets of £250,000 or more.

Self-certified Sophisticated Investor – This includes individuals who have made more than one peer-to-peer investment in the last two years or who meet certain other criteria relating to investment experience. This is the category I selected myself.

Investment Professional – Including corporate investors and SIPP or SSAS professional service providers.

Everyday Investor – This category is for investors who don’t fit into any of the categories above. They can still invest via Assetz Exchange but must pledge not to invest more than 10 per cent of their portfolio in P2P loans.

You will also be required to answer some multiple-choice questions to confirm that you understand the nature of investments that can be made on the platform. I found some of these questions quite challenging, and was pleased to get them all right first time. I would therefore recommend reading the information on the Assetz Exchange website (including the Help pages) carefully before proceeding to register. If you do make any mistakes, however, feedback is provided, and you can take the test again until you achieve a 100% correct score.

Once you have done all this, you will be able to fund your account. This must be done by bank transfer, as Assetz Exchange do not allow debit card payments. You will then be able to browse the range of currently available property investments:

Investing

Once you are registered on the platform and signed in, click on Exchange in the menu at the top of the screen and all current projects will be displayed. Here are a couple that are showing at the time of writing…

Clicking on any of these will open a page devoted to the investment concerned. Here you can read all about it, view reports and site plans, and so on. One very important area is the Order Book (see example below).

All buying and selling on the platform is conducted via an exchange (otherwise known as the Order Book) which works similarly to the secondary market on Property Partner.

So if you want to buy shares in a particular project, you can do so by accepting the best price currently available on the exchange. In the example above, there are £4,895 of shares available at zero discount (i.e. the original offer price).

If you want to get your shares at a lower price than this, you can make a bid. In the example, an investor has put in a bid for £75 at a 1.04% discount and another investor (or maybe the same one) has put in a bid for £154 at a 2.08% discount.

Conversely, if you wish to sell some or all of your shares at any time, you can accept the best bid (or bids) on the Order Book currently, or place an offer and wait to see if this is matched.

It does take a little bit of getting your head around at first, but it’s actually a simple and straightforward process. One thing to note is that if there is nothing showing on the right-hand-side of the Order Book (under Offers) you won’t be able to buy shares in that project there and then – though you can of course place a bid if you wish and see if a seller wants to match it.

In any event, if you want to buy, just click on the green Buy button (either on the Exchange page or the details page) and complete the short online form. You will need to indicate how much you want to invest, whether this should be from your General or IFISA account (see below), and whether the amount should include the FCC or not (see What Are The Charges? below).

You will also need to indicate whether you want to buy at the current best price (selected by default) or you want to try for a better price (in which case your bid will be added to the left-hand column in the Order Book).

The IFISA Option

As mentioned above, if you wish you can invest with Assetz Exchange via an IFISA (Innovative Finance ISA). As discussed in this recent post, this type of ISA for P2P investing gives you the same tax advantages as a cash or stocks and shares ISA. You don’t have to pay any tax on the money you make, whether this takes the form of dividends, income or capital gains.

Everyone has a generous annual ISA allowance of £20,000 in the current 2020/21 tax year (and next year as well). This can be divided any way you like among the three types of ISA. So if you open an Assetz Exchange IFISA, you can still have cash and stocks and shares ISAs with other providers as well, so long as you don’t invest more than £20,000 in total. You can also only invest money in one of each type of ISA in any one financial year.

Choosing the IFISA option on Assetz Exchange is very easy. You can do it when first registering on the site or later. The only extra thing you have to do is enter your National Insurance number.

If you have maxed out your ISA allowance – or have already invested in another IFISA in the current tax year – you can still invest via your default ‘Regular’ account. You can invest any amount this way, but of course any profits you make will potentially be taxable.

What Are The Fees?

Assetz Exchange do not charge any monthly fees to investors (this is in contrast to Property Partner, who made the unpopular decision to impose an Assets Under Management charge and monthly fee, greatly impacting small investors on the platform especially). The company does have to make money somehow, of course, and they do this from three sources:

Pros and Cons

Here is my list of pros and cons for Assetz Exchange.

Pros

1. Fast, easy sign-up.

2. Well-designed, intuitive website.

3. Low minimum investment (as little as 80p per project!) – this makes building a diversified portfolio straightforward.

4. Assetz Exchange take care of all the work involved in buying and managing properties. You just choose which ones to invest in.

5. Option to access money any time by selling on the secondary market (though this does depend on another investor being willing to buy your shares at a price you find acceptable).

6. Relatively low-risk investment options (though of course there are no guarantees)

7. Customer support (in my experience anyway) is fast, friendly and helpful.

8. Charges are reasonable. There is no charge for selling investments.

9. Potential to make money through both capital appreciation and rental income.

10. Rental income is paid into your account every month. You can either withdraw or reinvest it.

11. No monthly fees and only transaction-based charges to pay.

12. Opportunity to invest in socially beneficial developments such as sheltered housing

13. Tax-free IFISA option to which any investment on the platform can be added

14. Investors can vote for their favoured exit option (e.g. selling up) when the time comes

Cons

1. Can’t invest using a debit card

2. No auto-invest option currently available

3. Not as many opportunities as some P2P platforms (although the number is increasing steadily)

Closing Thoughts

I was impressed enough with Assetz Exchange to invest a small amount (£100) of my own money initially and will report back on PAS about how my portfolio fares. Here is how it’s looking at the time of writing, roughly a month after I opened my account. As you can see, my initial investment has grown by £3.87 from a combination of income received and capital growth. For a month that’s not bad at all – if it carries on growing at that rate I’ll be delighted! – but of course it is much too soon to draw any firm conclusions from this.

I particularly like the fact that with the low minimum investment on Assetz Exchange, even if you’re starting very cautiously (as I am) it’s easy to build a diversified portfolio. I like the relative simplicity of investing on the website and the fact that you can exit an investment any time via the exchange (though that does depend on willing buyers being available at a price that is acceptable to you). It is also good that there are no charges associated with selling on the exchange.

• You can, of course, withdraw uninvested funds from your Assetz Exchange account at any time.

Obviously there are risks in any form of investing and it is important to do your own ‘due diligence’ before proceeding. You should also bear in mind that this type of investment is not covered by the Financial Services Compensation Scheme, which covers savers with UK banks and other financial institutions up to £85,000. On the other hand, the potential returns are significantly better than the fractions of a percent typically on offer from savings institutions right now, while the risks appear to be at the lower end of the spectrum, with many of the properties on long-term leases with corporate/institutional tenants.

To be very clear, nobody should put all their spare cash into Assetz Exchange (or any other investment platform for that matter) but in my opinion there is definitely a case for including AE within a diversified portfolio.

As mentioned above, I shall be reporting back on how my Assetz Exchange investments perform on PAS in future. In the mean time, if you have any comments or questions about this post, or Assetz Exchange more generally, please do leave them below as usual.

Disclaimer: I am not a registered financial adviser and nothing in this post should be construed as personal financial advice. You should always perform your own ‘due diligence’ before making any investment and speak to a qualified professional adviser if in any doubt how best to proceed. All investments carry a risk of loss.

Please note also that this review uses my affiliate links. If you click through and make an investment or perform some other qualifying transaction, I may receive a commission for introducing you. This will not affect any charges you pay or the product/service you receive.