Crowdfunding as an idea is not a new concept. However, in recent years it has become increasingly high profile as businesses, particularly start-ups, have found accessing traditional forms of finance more challenging and sought new ways of raising capital.  

Crowdfunding (sometimes referred to as peer-to-peer or peer-to-business lending or investing) is based on the simple principle that an amount of capital for a particular project is raised by aggregating smaller amounts from large numbers of investors (often retail or smaller investors) organised through a central platform. Crowdfunding can take the form of lending or equity investment.

As the influence and popularity of crowdfunding has spread, its potential application in various different sectors has also grown. Property is one such sector and we are often asked whether it is possible to set up and operate a property investment fund using crowdfunding.

Crowdfunding can be a useful source of funds for property investment. Many of the larger crowdfunding platforms are willing to fund property investment projects and some platforms have been specifically established for the purposes of financing, for example, buy-to-let property acquisitions.