Fractional property platforms can look similar on the surface. These are the questions that separate them.
1. Regulation
- Is the platform authorised by the FCA, or are its promotions approved by an authorised firm? Check the FCA register.
- Does it carry out appropriateness checks before you invest, as UK rules require for high-risk investments?
2. Structure
- Is each property in its own company?
- Do you own shares in that company, or a contractual claim against the platform?
- What happens to your shares if the platform stops trading?
3. Fees
- Entry or arrangement fee
- Annual management fee and how it is calculated
- Fees on sale, on profit or on transfer of shares
- Costs charged by the property company itself
4. Disclosure
- Independent RICS valuation
- Lease or tenancy schedule
- Full running costs and any borrowing
- Regular reporting after you invest
5. Liquidity
- Can you sell shares before the property is sold? On what terms?
- How long is the investment term, and can it be extended?
6. People and track record
- Who runs the platform, and what is their property and regulatory background?
- Are past deals' actual results published, not just targets?
7. What you are buying
- Residential, commercial or both?
- Equity ownership or loans? See crowdfunding vs fractional ownership.
This guide is general information, not financial, tax or legal advice. If you are unsure whether an investment is right for you, speak to a regulated financial adviser.