Marking just how popular cryptocurrencies are (despite what the mainstream media may try to tell you), the UK property sector now accepts cryptocurrencies to purchase real estate, and pay deposits and rent in the rental sector – the first time the virtual currency has been used in the UK residential homes market.
Cryptocurrencies, Bitcoin in particular, have continuously hit national headlines globally as a vehicle for people to make a quick profit. Fuelled by a 400% rise in value and a record value of $19,174 (£13,588) in 2016, Bitcoin generated staggering profits for investors, and gained strong visibility for the broader cryptocurrency space. Since the boom, we’ve seen the birth of alternative cryptocurrencies which offer differing services, costs and methods, as creators try to attract new customers to their services.
Whilst increased global recognition is leading to mainstream adoption, some critics are warning that the cryptocurrency is volatile, risky and potentially dangerous. Last week, Bitcoin dropped in value to $7,003 (£5,051) amid fears of a regulatory crackdown in the US, South Korea, and China. However, even with these warnings, some businesses in the property sector are adopting the cryptocurrency as a payment method:
Bitcoin in the Property Sector: First UK home sold using Bitcoin
Late last year, a property developer announced it had completed the first sale of two homes in the UK, bought using the cryptocurrency Bitcoin. The first home, an off-plan new-build property in Colchester, was bought by a Bitcoin Miner who started mining coins at the beginning stages of the cryptocurrency for 82.55 Bitcoins (£350,000 at the time of purchase).
The land registry also agreed to let the buyer register the sale price in the cryptocurrency — previously the Land Registry had insisted sales could only be registered in Sterling due to concerns over money laundering.
Property management business in the US accepts Bitcoin as deposit
In a world first, an American property management company have introduced the integration of Bitcoin payments where tenants can pay their deposits using the cryptocurrency.
The business announced they would automatically convert the currency into USD using a digital cryptocurrency broker at the current market value. Since Bitcoin is extremely volatile, the value of the cryptocurrency would be locked in at the time of the payment. Then it would be converted into USD using a built-in API to get real-time exchange rates.
Build to Rent landlord accepting deposit and rent in Bitcoin
A London based property developer announced it would accept deposit payments and rent payments in Bitcoin, marking it the first time the virtual currency has been used in the UK rental market.
The co-living housing development in London announced last year that tenants could pay the £500 deposit using the cryptocurrency, and will be able to use it to pay their rent later in the year.
Danielle Cullen, Managing Director at StudentTenant.com comments: “Over the past twelve months we’ve seen a huge rise and adoption of cryptocurrencies globally. It’s a fascinating development, and one we would like to explore as it grows. We deal with consumers who are very aware of technology within our market, and we’re always keen to open up to new and innovative ways of doing things.
“At the moment, it’s a bit of a niche for a business to accept Bitcoin or other cryptocurrencies as payment, particularly due to the current volatility of some of the main coins. The idea of cryptocurrencies is still very much in its infancy, and the market will need to develop more before they become a mainstream payment method. But, that’s not to say such methods are too far away given the hype surrounding it.
“It’s great that the property market is adapting to change. It’s a very interesting concept for the prop-tech sector, and I’ll be keeping a close eye on the market to see how it develops alongside our industry.”
StudentTenant.com’s online lettings and booking platform for student accommodation, allows users to use the platform to pay their rent digitally (among other interfacing features). Now, the UK-based online student agent is considering the integration of cryptocurrencies into their service, giving tenants the option of paying rent with crypto.
Cullen continues: “We want to give our customers the widest choice when making payments, and depending on the ongoing stability, we are keen on looking into accepting cryptocurrencies on our platform. Bitcoin has grown massively in the last twelve months, and it’s potential to become a standing currency in the future cannot be ignored.”