With the rise of property crowdfunding becoming the next big thing this year, thanks to the demand for housing, P2P platform CrowdProperty has announced it has been used for pledges over £1m.

The site only launched last year and it is aiming to raise £20m towards its projects by the end of the year. It works by charging borrowers a fee of between three and five per cent, with the gross interest passed on to the loan holders.

Those who want to borrow money to develop a property can apply for a loan of up to 100 per cent on new developments on a 10-11 per cent annual rate. The interest charged is worked out using a number of due dilligence criteria, which assesses the risk of the loan.

It secures all the loans against the asset with a first legal charge, making it comparable to a mortgage from a bank or building society.

Simon Zutshi, founder director of CrowdProperty said: “Passing the £1 million target for lending is a key milestone in our growth strategy but we expect growth to accelerate significantly now that we have so many new, active lenders joining our crowd.

“With any new P2P proposition it is vital to ensure that early lenders build their confidence with real returns from solid projects delivering great value.”

The platform’s lenders receive a return of 10 per cent a year on the money they lend, which is higher than many other peer-to-peer lending platforms, Zutshi continued.

“Another exciting development which has recently become available via our platform is the added potential now for anyone with a SIPP or SASS pension to lend to our development projects, providing another angle for many people wanting greater diversity and a solid return on their capital,” he said.

To date, CrowdProperty has listed 100 projects on its site, with many more planned for the coming months.