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  • FIRST POST
    • Bailey90
    • By Bailey90 20th Oct 16, 6:34 PM
    • 5Posts
    • 4Thanks
    Bailey90
    Bricklane - Property ISA
    • #1
    • 20th Oct 16, 6:34 PM
    Bricklane - Property ISA 20th Oct 16 at 6:34 PM
    Hi all...
    I came across Bricklane - Property ISA earlier today and wondered if anyone had invested money in this way?
    How easy is it to access money once invested?
    How profitable is it? .
    And what are the real risk?

    Thanks in advance
Page 1
    • bigfreddiel
    • By bigfreddiel 20th Oct 16, 7:53 PM
    • 4,225 Posts
    • 1,954 Thanks
    bigfreddiel
    • #2
    • 20th Oct 16, 7:53 PM
    • #2
    • 20th Oct 16, 7:53 PM
    What did their prospectus say?
    • assured
    • By assured 31st Oct 16, 9:31 AM
    • 11 Posts
    • 0 Thanks
    assured
    • #3
    • 31st Oct 16, 9:31 AM
    • #3
    • 31st Oct 16, 9:31 AM
    I'm interested in what others think too.

    Presumably the rental income is equivalent to share dividends? If so this is only around 4.4%. Not sure how they reach the 6.5% they advertise.
    • Bailey90
    • By Bailey90 31st Oct 16, 9:34 AM
    • 5 Posts
    • 4 Thanks
    Bailey90
    • #4
    • 31st Oct 16, 9:34 AM
    • #4
    • 31st Oct 16, 9:34 AM
    I can't seem to find anyone or get further information from the Web... until I do. I don't want to risk it. The limited information on the site doesn't seem to be backed up by anything.
    • AnotherJoe
    • By AnotherJoe 31st Oct 16, 9:52 AM
    • 7,583 Posts
    • 8,183 Thanks
    AnotherJoe
    • #5
    • 31st Oct 16, 9:52 AM
    • #5
    • 31st Oct 16, 9:52 AM
    Its not really a property ISA, since, for a start, there is actually no such thing.

    AFAICS from a quick skim, its really just an S&S ISA in which 100% of the investment is with one single company. That company acts as a landlord, owning property and letting it out. So its no different to opening an ISA, putting all the money into say AstraZeneca, and then calling your ISA a "Health ISA".

    It does seem to be genuine, eg its not an actual scam, which doesn't mean it will work out of course.

    It might be an alternative to being a direct landlord, either for people who dont want the hassle and risk (all eggs in one basket especially), or who would like to be a landlord but dont have enough money to buy a property, or dont want to leverage their money via a BTL mortgage. You'd get the returns, minus of course overheads.

    What they evade in the detail on their website is that since its an ISA, you cannot also put money into an ordinary S&S ISA in the same tax year and i find it extremely poor (to say the least) that this is skated around and not explained explicitly in their FAQ especially since they do talk about cash ISAs in that respect, but not S&S ISAs.
    Last edited by AnotherJoe; 31-10-2016 at 10:01 AM.
    • dunstonh
    • By dunstonh 31st Oct 16, 11:18 AM
    • 89,552 Posts
    • 56,001 Thanks
    dunstonh
    • #6
    • 31st Oct 16, 11:18 AM
    • #6
    • 31st Oct 16, 11:18 AM
    There is no such thing as a property ISA. However, certain property investments can be held within a stocks & shares ISA.

    Whilst it is genuine I do have some concerns of the marketing of it:

    Their website shows their "property ISA" vs a cash ISA and the difference in return over 5 years. First of all, this is a stocks and shares ISA and should not be compared like that against a cash ISA in isolation. This is a investment risk whereas cash ISA does not have investment risk. It should be up against other property share and bricks and mortar property funds if you really wanted a close comparison. Or even a similar risk multi-asset fund.

    Also, the 5 year performance is simulated. Not real. It also doesnt state the dates of the simulated 5 year period. Past performance indicators should do this as a compliance requirement. There is a link that gives more detail of the dates and calculation but its almost as if it hidden away on purpose given the crude nature of it.

    It is also expensive. 2% initial from the provider in an era when no initial other than advice cost is the norm makes it expensive. 0.85% is fair enough for what it is depending on what costs are built into that 0.85% and how many are not included but suffered by the REIT.

    In most of the model allocations for investing, property tends to be around 0-15% of the portfolio. It does make sense to include property as part of most portfolios and there are plenty of long standing property share and bricks & mortar funds with long histories out there. Both active and passive in the case of property share. However, this shouldnt be a 100% investment.

    On the risk scale, in isolation of other assets, this would appear to be very high risk. 100% in one company in a niche area. AFAIA, the fund does not appear on the whole of market and is a non-traded REIT. So, you are limited in building a proper portfolio as you cant spread your S&S ISA annual allowance over multiple providers to create that balance. Also, that means that the level of disclosure is lower than you would see on whole of market investments. There is also very high liquidity risk on this type of fund as the assets are not liquid. Withdrawals could be suspended/delayed or reduced in value. A risk in common with bricks and mortar funds.

    Finally, as it stands, it owns just one property (bought in Oct 16) with several under offer. It is new. No track record, low liquidity and a high risk capital at risk investment. It is genuine but you are taking one hell of a leap of faith if you go with it.

    The blackrock global property securities equity tracker fund
    made 26.7% in the last 12 months, 10.4% in the year before, 6.3%, 14.4% and 13.5% in the earlier three years.
    The M&G Property portfolio made -6.6%, 10.8%, 13.8%, 3.4% & 1.9%.

    The negative year in the latter reflecting the liquidity issues of the UK market following the Brexit referendum result and larger than normal volumes of investors wanting their money out.
    Last edited by dunstonh; 31-10-2016 at 11:33 AM.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • Bailey90
    • By Bailey90 31st Oct 16, 11:22 AM
    • 5 Posts
    • 4 Thanks
    Bailey90
    • #7
    • 31st Oct 16, 11:22 AM
    • #7
    • 31st Oct 16, 11:22 AM
    Hi all,

    Thanks for all your replies it has been really helpful in me making the decision not too invest in this way.

    I hope the thread continues to help others make up their mind in what seems like a bit of an over sell in their marketing

    Thanks Again
    • jimjames
    • By jimjames 31st Oct 16, 12:21 PM
    • 12,183 Posts
    • 10,702 Thanks
    jimjames
    • #8
    • 31st Oct 16, 12:21 PM
    • #8
    • 31st Oct 16, 12:21 PM
    Hi all,

    Thanks for all your replies it has been really helpful in me making the decision not too invest in this way.

    I hope the thread continues to help others make up their mind in what seems like a bit of an over sell in their marketing

    Thanks Again
    Originally posted by Bailey90
    What other investments do you have? Are you looking at different non cash investment options for this years ISA allowance?
    Remember the saying: if it looks too good to be true it almost certainly is.
    • AnotherJoe
    • By AnotherJoe 31st Oct 16, 7:00 PM
    • 7,583 Posts
    • 8,183 Thanks
    AnotherJoe
    • #9
    • 31st Oct 16, 7:00 PM
    • #9
    • 31st Oct 16, 7:00 PM
    There is no such thing as a property ISA. However, certain property investments can be held within a stocks & shares ISA.

    Whilst it is genuine I do have some concerns of the marketing of it: Ditto. Very dodgy given what you've explained below.

    <snip>

    Finally, as it stands, it owns just one property (bought in Oct 16) with several under offer. It is new. No track record, low liquidity and a high risk capital at risk investment. It is genuine but you are taking one hell of a leap of faith if you go with it.
    .
    Originally posted by dunstonh
    OK I've changed my mind, it is verging towards a scam.

    One measly house ?And they've given a five year history despite owning that one house for five minutes? And give the impression they have property in 3 or 4 cities? Shysters IMO.

    Also numerous newspapers have written these guys up as if they have a large portfolio of houses? IMO they are equally complicit in making this look much more legitimate than it is.
    • assured
    • By assured 1st Nov 16, 1:23 PM
    • 11 Posts
    • 0 Thanks
    assured
    Thanks. Appreciate your help with this. I wonder if there's any benefit of investing in BrickLane's actual bricks and mortar over using a property index tracker?

    They say you'd own shares in the property.
    • bowlhead99
    • By bowlhead99 1st Nov 16, 1:45 PM
    • 6,886 Posts
    • 12,397 Thanks
    bowlhead99
    Thanks. Appreciate your help with this. I wonder if there's any benefit of investing in BrickLane's actual bricks and mortar over using a property index tracker?
    Originally posted by assured
    The benefit would be if the value of the properties they acquired in their small concentrated investment portfolio - and therefore the value of their investment vehicle in which you have a stake - went up in value much more than the weighted average return of all the other worldwide property investment portfolio companies that think they are doing a good job of it too.

    I'd suggest you don't have sufficient information to be confident that that's the case. The comments from dunstonh and others are sensible, as usual.
    They say you'd own shares in the property.
    Having shares in the actual bricks and mortar and getting registered as a part owner of all the land and buildings at the land registryregistry (i.e. shares in the actual property) is *not* what is going to happen because doing that with hundreds of part owners is entirely impractical.

    I haven't looked them up, but the way this would be done would surely be that you own some share of their investment company or other suitable vehicle which in turn buys the property or lends money to another company to allow it to buy the property. You don't literally buy an individual brick of the property for yourself.

    That's basically how property investment companies and investment funds work, and there are hundreds to choose from - I assume they aren't breaking new ground here.
    Last edited by bowlhead99; 01-11-2016 at 1:47 PM.
    • TheFaithfulServant
    • By TheFaithfulServant 16th Nov 16, 9:08 PM
    • 3 Posts
    • 0 Thanks
    TheFaithfulServant
    What would you recommend to invest my money in as an alterantive
    Hi thank you so much for the detailed response, I found it most useful, as I too was planning on investing it in bricklane, but have since changed my mind. What would you recommend to invest my money in as an alterantive? Is black rock a good investment options?
    • dunstonh
    • By dunstonh 16th Nov 16, 9:22 PM
    • 89,552 Posts
    • 56,001 Thanks
    dunstonh
    Is black rock a good investment options?
    Blackrock is an invesmtent company offering hundreds of different types of funds.

    To be honest, I would not be comfortable recommending anything as a) we dont know about your objectives b) we dont know your risk profile c) we dont know your knowledge and understanding, d) we dont know your capacity for loss and e) the board does not like investment recommendations.

    Your best option is to research and come back with your finding as we can discuss and comment on those much easier than picking a random number between 1 and 30,000 and saying that is right for you.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • hardikjshah83
    • By hardikjshah83 15th Mar 17, 9:41 PM
    • 9 Posts
    • 4 Thanks
    hardikjshah83
    bricklane expanded!!
    since I came across this investment option on Zoopla and started digging.

    looking at their website they now own about 5 properties and have another 5 in the pipeline. they seems to be buying one property a month.

    thinking of putting small amount on it to see how it goes!
    01/05/14 : -22545.93
    01/02/15 : -8133.00
    01/02/16 : -15867.00
    • bowlhead99
    • By bowlhead99 15th Mar 17, 9:59 PM
    • 6,886 Posts
    • 12,397 Thanks
    bowlhead99
    since I came across this investment option on Zoopla and started digging.

    looking at their website they now own about 5 properties and have another 5 in the pipeline. they seems to be buying one property a month.
    Originally posted by hardikjshah83
    OK. There are millions of properties in the world and tens of thousands of companies. So a small portfolio of only owning five things with perhaps a few more things in the pipeline, does not seem like a very diversified way to spread your money around investment opportunities.
    thinking of putting small amount on it to see how it goes!
    The numbers in your signature suggest you shouldn't, unless you forgot to update your signature for the last year and now have a few hundred thousand to invest.

    If you do have a few hundred thousand to invest, it wouldn't be too inappropriate to put a couple of grand into a niche investment fund with no track record, just 'to see how it goes', because we all like to have a bit of fun from time to time and losses would only be a small proportion of your overall investment portfolio.
    • DonnyShot
    • By DonnyShot 9th May 17, 5:57 AM
    • 1 Posts
    • 1 Thanks
    DonnyShot
    I have been looking at Bricklane for a while now and invested a small sum to see how it goes.

    At the time of this post they now have 9 properties and a further 10 currently in due diligence.

    Whilst it is far too early for me to report on returns (in fact im negative so far due to the hefty 2% deposit fees) I can say it is easy to use and pretty much hassle free.

    However.... the way they report your account is very confusing and non transparent. For example, they value the account as invested money + rental income + property price change. But, they bundle the rental income and property price change into one figure and then represent this in a "share price". For the life of me I can't figure out what or how this relates to my account balance.

    Or maybe its just because i'm a little bit thick???
    • jimjames
    • By jimjames 9th May 17, 12:31 PM
    • 12,183 Posts
    • 10,702 Thanks
    jimjames
    Whilst it is far too early for me to report on returns (in fact im negative so far due to the hefty 2% deposit fees) I can say it is easy to use and pretty much hassle free.
    Originally posted by DonnyShot
    Unfortunately that doesn't tell you anything about the likelihood of getting any of your money back
    Remember the saying: if it looks too good to be true it almost certainly is.
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