London developer to allow rental tenants to pay deposits in bitcoin The Collective says there is international demand to accept cryptocurrency, and will take it for rent payments from autumn
A London property developer is to allow its tenants to pay their deposits in bitcoin – the first time the virtual currency has been used in the UK residential homes market.
Co-living pioneer The Collective has announced that prospective tenants can pay deposits from Monday in bitcoin. By the end of this year it will also accept rent payments in the cryptocurrency. This is the first time in the UK a major property developer has enabled bitcoin payments. The Collective said it was in response to demand predominantly from international customers.
The price of bitcoin hit a record high of $4,700 (£3,627) last week, having risen by 350% since the beginning of the year. Bitcoin is the world’s first decentralised currency and is not controlled by any government or bank. While increased global recognition is leading to mainstream adoption, critics warn that – as a vehicle popular with speculators looking to make a quick buck – it is volatile, risky and potentially dangerous.
However, from Monday The Collective’s online booking form for its Old Oak co-living scheme – the world’s largest co-living development,with 550 rooms, which launched last May and where rent starts from £178 a week for a 10 sq m space – will accept bitcoin deposits. The standard deposit is £500 – for all unit types and sizes – and The Collective has pledged “spot conversion”, which means it will bear any financial risk while holding the deposit, returning it at the original value when the tenancy finishes.
Tenants will have the ability to pay their rent using bitcoin from this autumn.
The Collective is like a student halls of residence but for people starting their career in London “The rise and adoption of cryptocurrency globally, particularly bitcoin, is a fascinating development in how people store value and transact for goods and services worldwide,” said The Collective’s chief executive and founder, Reza Merchant. “With many savers and investors now choosing and becoming more comfortable with cryptocurrency, people will expect to be able to use it to pay for life’s essentials, including housing deposits and rent.”
However, the Association of Residential Letting Agents (Arla) expressed reservations. “There may be niche parts of the market that would be willing to accept bitcoin in exchange for traditional rental income,” said David Cox, chief executive of Arla Propertymark, but I think the bitcoin and electronic currency market is still in its infancy and the market will need to develop more before it becomes a mainstream payment method for rent.”
The Collective’s head of technology, Jon Taylor, said: “One of the biggest barriers to the popularity of bitcoin is making it more consumer-friendly, and we believe this will become established as an easy and convenient way to pay deposits.”
The Collective’s model is to give tenants a hassle-free life similar to that in a student hall of residence, but for people starting out on their career. Its expanding facilities offer a 21st-century alternative to flat-sharing, the traditional rite of passage for twentysomethings arriving in the capital. Tenancy levels are typically 97.7% and the first Collective baby was born in August, although the family has since had to move out as children and pets are not allowed to live in the building.
The company recently announced that the London Legacy Development Corporation was set to grant the world’s first “co-living” planning permission for its latest building, a 250-room, 19-storey development in Stratford, east London, which will open in late 2018 or early 2019. It has also acquired a third major site in London’s Canary Wharf.
Isle of Man firm to launch 250 million-pound Dubai property priced in bitcoin
NEW YORK (Reuters) - The Knox Group of Companies, with headquarters in the Isle of Man, announced late on Tuesday it will launch a residential and commercial property development in Dubai valued at 250 million pounds ($325 million), with residences that can be purchased in the digital currency bitcoin.
The company said the 2.4 million-square-foot (22.3-hectare) property venture called Aston Plaza and Residences, consisting of two residential towers and a shopping mall, will be the first major real estate development that will accept bitcoin as payment.
The Dubai project is one step toward efforts to push bitcoin into the mainstream. Maligned and ridiculed in its early days, bitcoin hit a record high of $4,870 on Friday, surging more than 400 percent so far this year.
The whole project is expected to be completed by late 2019.
“This a great opportunity for the crypto-currency community to offload some of its significant gains, especially the early adopters, and actually deploy them in hard-core assets which I‘m building,” Knox’s chairman, Doug Barrowman, said in an interview with Reuters.
Barrowman, originally from Scotland, in 2008 founded Knox, which engages in private equity, property and wealth management. The company manages 1.5 billion pounds in assets, he said.
The Dubai venture is a collaboration with Baroness Michelle Mone, a member of the House of Lords and founder of the lingerie company Ultimo. Mone said in an interview that her interior design company will do the interiors of the apartments.
Bitcoin payments platform BitPay will process the bitcoin transactions. The company already provides bitcoin payment tools to companies such as Microsoft and Richard Branson’s space venture, Virgin Galactic.
Knox’s Barrowman said the current popularity of initial Coin offerings (ICOs), a token-based method of fundraising for technology start-ups, has shown that there is huge demand for crypto-investors to diversify their assets.
Studio apartments will start in price from 33 bitcoin and, mirroring ICOs, early investors will be given additional bonuses, Barrowman said. Packages for interior design services and furniture can also be purchased in bitcoins.
One-bedroom apartments can go for about 54 bitcoins, or $250,000, Barrowman said, while two-bedrooms can be bought for 80 bitcoins, or $380,000.
Essentially, the apartments will be offered at a 15-20 percent discount, Barrowman said.
There will be 1,133 apartments; 480 have already been sold in traditional currencies and the remaining will be earmarked for bitcoin holders, Baroness Mone said.
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