Since the bitcoin price rose sharply last year, the sale of properties for the digital currency has become, if not commonplace, definitely a growing trend – albeit for more luxury properties.
Now, a new company is entering the cryptocurrency housing sector.
Offering international investors the chance to buy UK properties with an extensive range of digital currencies, including bitcoin, Cai-Capital claims to be the first UK firm providing this facility.
Targeting markets such as China, Russia and the Middle East, the Cheltenham-based company, which works in partnership with estate agent Hill-Mathieson & Partners, hopes that cryptocurrency payments will draw in new customers for the company’s sales, letting and property management services.
Cai-Capital has been actively following the development of digital currency, so director Keith Stukins says the move is a natural progression for the company. He explained:
“The list of companies accepting digital currency transactions continues to grow daily and is increasingly becoming a more popular way of conducting business. In this arena, Cai-Capital leads the way in the UK Property sector.”
Going digital
By introducing digital currency payments, clients will have opportunities to purchase property without the uncertainty of swings within the exchange rates found in normal money markets, the company director said.
Furthermore, this method enables greater flexibility than typical banking exchanges and transfers, although any prospective clients will still need to be wary of local laws and compliance issues.
Unusually for a mainstream business, Cai-Capital is accepting most major digital currencies, with more being added on a weekly basis.
At present, said Stukins, the company can facilitate the exchange of bitcoin, litecoin, ripple, maxcoin and quark, among others. The exception, he said, is currencies that are new to the market and have little or no market volume.
Security procedures
Taking on board security concerns clients may have regarding trading in digital currency, especially following the media fanfare of Mt. Gox‘s downfall, Cai-Capital applies a “risk-adverse process” to ensure funds remain safe once they arrive with the company.
On receipt of a transfer, Stukins indicated, Cai-Capital moves the funds into private paper wallets that are stored securely. Then, to ensure exposure of loss is kept to a minimum, transfer amounts are agreed with the client as the funds are moved between the private paper wallets and Cai-Capital’s cryptocurrency broker partner Acquire CC.
All paper wallets adhere to a proprietary multi-signature process to reinforce security and the client’s money is deposited directly into his or her lawyer’s account prior to the exchange of contracts or purchase completion.
The funds remain within the clients lawyer account until disbursements are required. The process is similar to any other property purchase if not simpler, Stukins said.
China targeted
One further advantage – for the cryptocurrency community this time – is that, as property deals often involve large amounts of funds, using a partner such as Acquire CC helps execute such deals without triggering a market price movement.
This is achieved by spreading the transactions in multiple instances across various markets simultaneously, Stukins explained.
When asked how much business has so far been conducted in digital currency, he said, “interest continues to grow, which has resulted in a bitcoin transaction in the region of £1m being completed with a further transaction being in the latter stages of the process”.
Furthermore, the company’s recent business trip to Hong Kong received significant interest and media attention, said Stukins:
“We envisage a high level of enquiries to be forthcoming, particularly from mainland China.”
Bitcoin in the property market
While Cai-Capital may be the first firm offering cryptocurrency-financed property sales and rentals in the UK, other companies have already started offering similar services worldwide.
In January, Manhattan-based real estate brokerage firm Bond New York announced it would be accepting bitcoin as payment for property transactions. In the same month, Canada-based Quantum Properties began accepting bitcoin deposits for properties it sells locally.
Rental services are also catered for, in the US at least. Startup Rentalutions, an online platform that helps landlords manage leased properties, started accepting bitcoin for rent last August.
Furthermore, a number of individual owners have made their properties available for bitcoin.
In December, former casino owner Jack Sommer offered his luxurious Las Vegas mansion for $7.85m or the equivalent in bitcoin, and in March a $500,000 Bali villa sold in what may have been the biggest bitcoin purchase on record.
On a similar note, Canadian Kevin Kelly is holding a ‘competition’ called CryptoCondo, in which he is selling tickets for bitcoin with the random winner to take over ownership of his luxury apartment in Toronto.
Homeless outreach Sean’s Outpost is helping adjudicate the draw, which is effectively a kind of crowdsale, and will take 5% or more of the final winnings, which are hoped to be in excess of $520,000.
London houses images via Shutterstock