A British real estate lending platform with an excellent track record and impressive growth
|Total Investment Volume||£27m+|
|Average annual interest||10.08%|
|Investment Fees||0.6% secondary market fee|
|Who's eligible to invest||UK residents|
|Investment Type||Real estate lending|
|Auto Invest Function||Yes|
PROS & CONS
- Zero capital loss so far
- Higher returns than competitors
- Good performance during the COVID crisis
- High minimum investment amount
- Low availability of loans
- Poor transparency about the company’s condition
- BLEND hasn’t lost a penny of investors’ money over four years of activity. There was only one default in 2018, but the capital was eventually recovered. Although past performance doesn’t guarantee future results, this is a very good sign for prospective investors about the company’s ability to provide high quality deals (and effective debt recovery).
- Not only did investors avoid losses, they also earned more than on the vast majority of British peer-to-peer platforms. The average return of just above 10% is more attractive than on similar real estate lending platforms in the UK, such as Kuflink (roughly 7%) or CrowdProperty (up to 8%). At the same time, defaults have not been an issue, and LTV (loan-to-value) ratio is kept at a reasonable level of max 68%. BLEND claims that their ability to generate such great returns comes down to the strategy of searching for ‘niche lending opportunities in high-growth areas across the UK where traditional lenders are less active’ – that is outside the most ‘obvious British property markets.
- BLEND won FinTech Business of the Year at the 2021 GoTech Awards and was included in Business Leader’s list of the top 32 business heroes of COVID-19. And for a good reason – they doubled their funding volumes in 2020 amidst the pandemic. They have also recently funded the two largest projects in the platform’s history, worth £2.25 and £1.95 million. It seems like the COVID-induced crisis in P2P lending didn’t affect them at all.
- With a £1,000 minimum investment threshold, you need a thick wallet to achieve decent diversification. This can be a deal-breaker for low-volume investors or those who want to devote only a small share of their capital to UK-based real estate investments.
- There haven’t been a lot of deals available – an average of 1.5 per month since the first loan was funded in August 2017. It might have been accelerating following BLEND’s good growth, but open investments are still hard to come by – at the time of writing, there are none available. They also tend to get funded really quickly – the two aforementioned largest deals took only four and two days respectively to close.
- The Statistics page is basic but provides the key data on loan performance. However, information about the company’s ownership structure or financial results is missing, and this is quite relevant given BLEND’s direct investment structure. Worse yet, according to documents uploaded to the Companies House database, BLEND recorded losses of roughly £460,000 in 2020 and £81,000 in the 2019 fiscal year.
Who is behind Blend Network?
Yann Murciano is BLEND’s founder and CEO. He and BLEND’s Chief Strategy Officer Roxana Mohammadian-Molina had previously worked at the London branch of Morgan Stanley. It’s quite evident that the whole 7-person team has been drawn from London’s City, having held positions at prominent financial and real estate enterprises. It’s not clear who, if anyone, owns BLEND’s shares other than Mr. Murciano.
What does Blend Network offer?
In theory, BLEND offers loans not only to property developers but also to businesses in other sectors that can offer property as security. In practice, virtually all projects have involved real estate acquisition, refurbishment, or development. Loans start from £150,000, and most last between 12 and 24 months. There are three main instalment types:
- ‘Classic’ schedule means you’ll regularly receive a share of the principal along with the interest until the loan is fully repaid.
- ‘Interest only’ (bullet) loans involve periodical interest repayments and capital repayment at maturity.
- Roll-ups allow the borrower to pay nothing for a period (e.g., the first 12 months on an 18-month loan). Rolled-up interest is accrued monthly, added to the capital of the loan, and repaid at maturity.
How much can you earn?
BLEND advertises earnings between 8 and 12%, and the average historical return stands at roughly 10%, so you can expect to make more or less that much. You can adjust your risk-return ratio slightly by focusing more on A-rated loans with 8% average return, B-rated (9.75%), or C-rated loans (12%). The low availability of projects, however, will likely make you invest in pretty much any opportunities that come up.
Who is Blend Network best for?
British bank account holders who seek above-average returns from secured real estate loans should definitely give BLEND a try. You need, however, a long investment horizon and a significant amount of capital to be able to diversify properly and really take advantage of the platform’s offer.
How to invest at Blend Network?
After signing up, you need to activate your account by fulfilling the KYC and AML checks, which can last up to two business days. Once this is done, you can set up an auto-invest strategy or wait for projects to open and invest manually.
BLEND’s by far strongest point is the extremely competitive returns, especially for UK market conditions. Not the longest but surely an excellent track record as well as impressive growth in the last two years also work in BLEND’s favour. Overall, it seems like a solid platform with an experienced team who know their business. Hopefully, as the platform gains pace, more and more deals will become available with time. The company’s financial condition and little transparency about it remain an issue – BLEND going bust would be a real pity, not only for the investors but the British real estate lending sector overall.
At P2PMarketData we are dedicated to providing unbiased reviews of peer-to-peer lending, real estate crowdfunding and crypto lending platforms. Among other, in our mission to bring more transparency to the market we closely monitor and track over 70 platforms funding volumes.
When reviewing an alternative investment platform, we consider a variety of factors such as:
- Number of investors
- Minimum investment requirement
- Historical annual returns
- Diversification opportunities
- Reinvestment opportunities
- Educational and informational offerings
- Platform fees
- Total capital invested
- Features (such as secondary market and automatic investing)
- General transparency (the difficulty of finding who the owners are, how they make money on the platform (fees), terms & conditions and more)
- Management team
We also look into the company’s online reputation (for example customer reviews, news, complaints, average monthly searches and social media).