FAQs

Borrowers

You must of course have 5% of the agreed purchase price from your own resources and then, via this platform, you can borrow an additional 20%. Going beyond this limit may make the loan unaffordable so we would urge caution.
Once your profile is on our website, investors are likely to view the profile almost immediately. The more attractive the profile, the more quickly investors will respond favourably. It is therefore in your interest to present a full profile but it must be accurate. Once the bids from investors match the amount of money that you wish to borrow, you will be made aware of this and your conveyancing solicitor can draw down that money into their client account in time for you to exchange contracts. The money is never made available to you as an individual but only to your solicitor.
The maximum term of the loan is 10 years, but you can repay the loan at any time within this period, without charge.

At the end of 10 years, you can re-apply.
The interest you will be asked to pay will always be the Bank of England base rate +5.5%. When interest rate rises, which is inevitable as it is currently at a record low, your interest rate will increase by exactly the amount by which the Bank of England base rate increases.
If you begin to suffer repayment difficulties, please contact us either by telephone or email and one of our Customer Service Executives will be pleased to discuss a variety of solutions with you. We will do our best to be sympathetic and work with you but, of course, ultimately the loan has to be repaid.

Twelve months before the end of the agreed loan period, Property Pact will contact the Borrower(s) in writing to remind them of the terms of the loan and that it is due to be repaid in twelve months’ time. The Borrower(s) will be reminded in writing at three month intervals of the impending end of loan date and invited to communicate with Property Pact should there be any issues that the borrower feels may impact their ability to repay the loan in full.

At the end of the loan period, the original agreement will terminate and the investor(s) is/are entitled to receive his/her/their capital along with any capital appreciation.

The Borrower will need to have refinanced the loan, which can be done through reapplying through Property Pact, or via alternative means, such as a remortgage. For further options, the Borrower(s) will be advised to refer to an Independent Financial Adviser.

A credit score is a numerical value assigned to individuals by lenders to determine the level of risk involved in lending you money, also known as your credit worthiness. It is calculated from the information held on your credit file, which is a summary of your credit history.

Lenders get their data from three UK Credit Reference Agencies: Equifax, Experian and Callcredit. These agencies use different score ranges to assess individuals’ credit ratings. For example, the maximum credit score in an Equifax report is 710 with a score over 467 considered “excellent”. On the MyCreditMonitor scale, however, a score of less than 559 would be considered as “Very Poor” and applicants would need a score of between 635 and 710 in order to be in the top bracket of borrowers. Using the Experian scorecard applicants would need a score between 961 and 999 to be considered “Excellent”.

As the credit scoring figures vary between Credit Reference Agencies, Property Pact has opted to simplify matters by allowing only those with “Good” or “Excellent” ratings (as defined by the Credit Reference Agencies) to qualify as a potential borrower.

Investors

Property Pact works hard to mitigate risks for investors and the loan that you make will be noted as a Restriction on the property's Title Deeds at the Land Registry.

We should point out that this is NOT security that is equal to a charge. Very briefly, the Restriction will oblige any solicitor acting for any future purchaser to inform Property Pact of the proposed transaction and the solicitor will wish to have a clear title before advising their clients to exchange. To obtain this clear title all loans must be repaid. We would urge you to read the full legal description and opinion on Restrictions, please click here.
The standard benchmark for our interest rate charges is The Bank of England base rate, and you will receive this rate +5% gross. If the base rate rises, then your interest payments will rise.
As the website has just been launched, we have no history and therefore no evidence of defaults.

It should be noted that before a potential borrower can be posted on our website, we will have checked for credit worthiness for the amount that they wish to borrow, via external independent agencies, and they are likely to be in possession of an "in principle" mortgage offer. The mortgage lender will be aware that the purchaser has obtained assistance in raising the deposit.
The question of individual taxation on receipt(s) of money from P2P platforms is currently under discussion but, as of today's date, we can pay you this income gross. You will therefore need to take your own tax advice in respect of declarations to the Inland Revenue.

Non-payment during the term of the loan

Property Pact will take determined action to protect investors where borrowers have not engaged with the firm and have reneged on any of the agreements undertaken in their contract with the lender.

It is essential that we maintain a strictly neutral position when serving the interests of both borrowers and investors and, if a lifestyle change occurs that impacts on the repayment to the investor, then we will need to take action. If a borrower becomes unable to or refuses to pay (in circumstances not covered by insurance), the steps we would take are outlined below:

  1. In the first instance, Property Pact would open a dialogue with the borrower. It could be that a short break is required for the borrower to be able to deal with the issue then return to making full regular payments. This would need the agreement of the lender and a maximum repayment break would be fixed and agreed.
  2. If a repayment break could not be agreed or is not appropriate, the 2% per annum penalty rate would start to be applied. If this action is ineffectual, interest will accrue at the standard rate, plus the 2% penalty rate, and be capitalised up to the end of the loan period. At that time, the borrower would need to repay the loan to match the terms of the legal agreement to which they are committed.
  3. If no other alternative was available, the borrower would be allowed to sell the property in order to repay the loan, plus any interest due.
  4. If all options are exhausted in seeking resolution, the investor can revert the terms of the Loan Agreement and take legal steps to recover the monies owed. This action and the commencement of proceedings is entirely at the discretion of the lender. The legal action would remind the borrower that this debt has been noted on the title deed to the property and will need to be cleared before the property can be sold with a clear title deed.
If you wish to release your Capital earlier, then we would be pleased to re-advertise this investment opportunity on our website. This would enable another investor to replace you and their funds would replace yours, releasing your Capital.

Please be aware that you will have received interest throughout the term of your loan and, by early redemption, you will forego any right to Capital appreciation.
Our Company has a robust "Living Will" in place.

Very briefly, if Property Pact withdraws from the market for whatever reason, a team of solicitors will pick up the administrative burden of ensuring that each loan can be successfully administered through to termination.

Therefore, as an investor, you will of course have been informed of our withdrawal from the market and who will be replacing it, but it should not have any impact upon either your interest repayments or your Capital investment.
Every investor should realise that any Capital investment will always put Capital at risk.

The majority of investors that we attract are likely to be experienced property investors who will appreciate that property values can fall as well as rise. This may result in the return of Capital being less than the amount that was originally invested.
Yes, our Company is authorised and regulated by the Financial Conduct Authority (FCA) and our Firm Reference number is 729192, which can be verified on the FCA website.

You may be pleased to note that the FCA is a "principles based" Regulator and our Company philosophy is aligned to the Regulator's requirement in that we "Treat our Customers Fairly" and our customers' demands and needs are at the very heart of our business.

Twelve months before the end of the agreed loan period, Property Pact will contact the Borrower(s) in writing to remind them of the terms of the loan and that it is due to be repaid in twelve months’ time. The Borrower(s) will be reminded in writing at three month intervals of the impending end of loan date and invited to communicate with Property Pact should there be any issues that the borrower feels may impact their ability to repay the loan in full.

At the end of the loan period, the original agreement will terminate and the investor(s) is/are entitled to receive his/her/their capital along with any capital appreciation.

The Borrower will need to have refinanced the loan, which can be done through reapplying through Property Pact, or via alternative means, such as a remortgage. For further options, the Borrower(s) will be advised to refer to an Independent Financial Adviser.

Property Pact will take determined action to protect investors where borrowers have not engaged with the firm and have reneged on any of the agreements undertaken in their contract with the lender.

If at the end of the loan period the Borrower intends to continue to live in the property which is the subject of the loan, and they absolutely refuse to repay the loan to the Investor(s), Property Pact will do its utmost to help resolve the situation. The Borrower would be reminded that any potential legal action could lead ultimately to the loss of their property, or even bankruptcy.

As a last resort, the Investor(s) will already be in possession of an individual loan agreement between themselves and the Borrower and this loan document will enable the Investor(s) to take legal action against the Borrower.

Any legal action would remind the Borrower that this debt has been noted on the title deed to the property and will need to be cleared before the property can be sold with a clear title deed.

Property Pact gets its data from three UK Credit Reference Agencies: Equifax, Experian and Callcredit. These agencies use different score ranges to assess individuals’ credit ratings. For example, the maximum credit score in an Equifax report is 710 with a score over 467 considered “Excellent”. On the MyCreditMonitor scale, however, a score of less than 559 would be considered as “Very Poor” and applicants would need a score of between 635 and 710 in order to be in the top bracket of borrowers. Using the Experian scorecard applicants would need a score between 961 and 999 to be considered “excellent”.

As the credit scoring figures vary between Credit Reference Agencies, Property Pact has opted to simplify matters by allowing only those with “Good” or “Excellent” ratings (as defined by the Credit Reference Agencies) to qualify as a potential borrower.