“The idea for me was a no-brainer.” New crowd platform tackles UK’s housing shortage, one investment at a time

The UK needs to build a million new homes in the next four years, according to government statistics, which is why Gregory Baker set up the nation's first investment platform for strategic land, Intro Crowd

The UK needs to build a million new homes in the next four years, according to government statistics, which is why Gregory Baker set up the nation’s first investment platform for strategic land, Intro Crowd

Imagine a platform that allows investors to build the cornerstone of a community. Gregory Baker’s vision for the recently launched platform, Intro Crowd, allows investments into land with potential for housing development by purchasing shares in companies owning the land for as little as £1,500.

“The Government has pledged to build one million new homes over the next five years and the challenge is finding the land on which to build them,” Baker told Growth Business.

Reeling from the success of his first venture, Hermex FX, Baker launched Intro Crowd after identifying what he believes is a huge opportunity within the PropTech space. 

“Intro Crowd finds promising sites next to existing settlements which are experiencing a high growth in population. The sites are then listed on the platform with site plans, a report and indication of future land value from chartered surveyors,” he explained.

After the purchase of the site has been funded, investors hold shares in a company which owns the land proportional to the amount they put in. Intro Crowd then handles the planning application process and when the land is sold to a housing developer the net profits go to investors.

“The concept itself is very old. Large pension funds, financial institutions, and big property developers have done this for a long time. The issue has been the exceptionally high barrier to entry for ordinary investors. We’ve taken a concept that we know works and made it accessible to ordinary investors,” Baker added.

“The idea for me was a no-brainer. We desperately need houses in this country, considering our ageing population and the rising demand. It’s a lack of suitable sites that has historically been the issue. We want to bring the best sites with the best prospects to investors. This is why we have Christopher Merriman on board with his extensive network. His track record speaks volumes and I’m sure we have the right team in place.”

As a fellow of the Royal Institute of Chartered Surveyors, Merriman is an expert in the planning side. His role is primarily that of identifying sites all over the country with most potential for development, the best prospect for gaining planning and delivering the most return on investment for Intro Crowd’s investors.

As part of due diligence process, Merriman looks at the local infrastructure, and assesses if it can cope with new developments. “It’s very important to us that all the local amenities and infrastructure are in place. Can the local rail network cope with a new housing developments? Is the development sustainable with local infrastructure, including the motorways, local schools, and so on? These are the kind of questions we address early on by surveying the sites, and working with local and national property agents,” Baker explained.

An example of a drone-captured maps

He stressed that Intro Crowd isn’t interested in doing anything controversial or disruptive to existing communities, working with local planners and local parish councils to get the buy-in of residents. “Ultimately if we were looking at two locations: an old property within a conservative community, and another much more suited to a new expanding population with history of new development in the area, it would be the second we’d look at.”

Investors enter their details on the platform and undergo an accreditation process, which classifies which type of investor they are. Investors will also need to take and pass an appropriateness test, which, according to Baker is crucial. 

The business model works on a simple fee structure, including a 2 per cent investment fee, plus a one-off management fee dependent on the site. Following the process, Intro Crowd will charge a 5 per cent “success fee” based on the gross proceeds of sale.

“This is an investment for ordinary retail investors as well as sophisticated and high net worth clients. It is an opportunity to diversify their portfolios into an alternative asset class. However because there is no guarantee that the land we purchase will secure planning permission, we make it absolutely clear that this should be considered a high risk, long term investment and that an individual’s capital will be at risk. It should form part of a well-balanced, well diversified portfolio,” he advised.

The platform includes drone fly-through views of the sites to bring it to life. “The drone fly-through show potential of the site, and let potential investors view existing settlements, local schools, roads, and shops. It’s a key part of the user experience, in addition to two independent reports from well-recognised property companies of the planning potential and future value of the site,” Baker said.

Intro Crowd has already purchased its first land site to kick start the launch, a strategic land development at Cam, near Dursley in Gloucestershire. Additional sites to be funded by investors will be added to the platform over time. 

Praseeda Nair

Praseeda Nair

Praseeda was Editor for GrowthBusiness.co.uk from 2016 to 2018.

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