The company offering the service is also exploring how to accept rent payments in Bitcoin, a popular cryptocurrency.
A UK co-living company has announced that it will begin accepting down payments made in Bitcoin, according to CoinTelegraph, making it that much easier for traders hooked on effortless, outstanding returns to speculate in another bubble-prone market: UK housing.
Co-living pioneer The Collective announced the decision on Tuesday, saying it’s the first developer that will accept payments in cryptocurrency. The company added that it’s exploring how to accept rental payments in bitcoin, which it hopes to implement later in the year. It said that its decision to accept bitcoin was related to demand from international clients.
The company has pledged to perform a “spot conversion” of users’ deposits – a fancy way of saying it intends to hedge its position – so that it bears any financial risk while holding the deposit.
The Collective’s online booking form for its Old Oak living scheme, an ambitious co-living development with 550 rooms, will be accepting Bitcoin as a deposit on the flats.
The standard deposit is £500, which equates to about 0.148 at time of publishing. Additionally, with the volatile nature of Bitcoin seemingly holding back its ability to be utilized as a currency, 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.”
The Collective’s chief executive and founder Reza Merchant said the decision was a bold move for the UK property market.
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.
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.”
It’s a major step indeed. Housing prices in London have risen 65% since 2011, compared with Bitcoin’s more-than 300% climb since the beginning of the year. But we imagine some less risk-averse Bitcoin investors might be attracted to the deal, reasoning that it’s a smart way to lock in their investment returns.
But London property values might not be as invincible as the world thinks.
UK’s Land Registry data for three London boroughs shows transaction volumes in London are at all-time lows. Back in December asking prices in London dropped 4.3%, with inner London down 6%. More exclusive areas dropped by as much as 10%.
Between 2006 and 2016, average home prices in the capital grew from £257,000 to £474,000 or by a very substantial 84.4%. These large gains were ‘built’ on the back of the very large appreciation in prices between 1996 and 2006.
Despite this, the Collective’s head of technology, Jon Taylor, told CoinTelegraph that their company is proudly breaking down barriers to Bitcoin’s legitimacy.
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.”
According to CoinTelegraph, private property owners in the US have occasionally priced their property in Bitcoin in the hopes of attracting buyers, as well as accumulating the valuable digital currency. A well-regarded Miami trader recently placed his house for sale in Bitcoin after first trying to entice the seller to pay him in Bitcoin back in 2014.
With the economic threat of Brexit looming in the not-too-distant future, some say the UK housing market is headed for a leveling off if not an outright drop. But who knows, maybe we will see one last leg higher as the crypto traders look to cash in their winnings before the next Mt Gox kills the market.
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