acquires UK-based Property Partner ahead of SPAC close

The deal could give Better a way to augment its lending business with the potential to enable fractional ownership of properties in the U.S. and other markets.

Online mortgage company has acquired U.K.-based startup Property Partner as it seeks to expand into new markets and offer new product lines. The deal could give Better a way to augment its lending business with the potential to enable fractional ownership of properties in the U.S. and other markets.

Better plans to go public later this year through its planned merger with a special purpose acquisition company (SPAC) in a deal that values it at $7.7 billion. In the meantime the company has been active in the M&A market, acquiring two U.K.-based companies in the lead up to the deal’s close.

In July, Better announced its acquisition of Trussle, a digital mortgage brokerage in the U.K. that was widely seen as its first step to international expansion. But with the purchase of Property Partner, Better could gain technology capabilities to expand its feature set in the U.S. and other markets.

Launched in 2015, Property Partner enables fractional ownership of “buy to let” properties throughout the country. Through its platform, users could invest in individual properties or in a portfolio of properties and earn a portion of the rental income generated by those assets. It also created a resale market, enabling users to sell off their shares to other users.

The startup claims more than 9,000 investors on its property crowdfunding market and £140 million of assets under management. With the Better acquisition, the company expects to be able to expand both its investor base and properties to invest in.

Property Partner sent a message to users late last week to inform them of upcoming changes as a result of the deal. The startup announced it was temporarily pausing trading on the resale market while promoting some of Better’s plans as a result of the deal.

Under the new ownership, Property Partner said it would be able to reduce fees, grow its investor base, and dramatically expand investment opportunities by adding properties in the U.S. and other international locations to its platform.

For Better, the deal adds a new income stream in the short term while enabling the company to completely reimagine homeownership over a longer time horizon. Over the years Better has sought to augment its core mortgage lending business with additional products and services, including real estate agents, title and homeowners insurance, and the ability to make all-cash offers in certain markets in which it operates.

But in an interview with TechCrunch last month, Better CEO Vishal Garg previewed a vision for how fractional ownership could reduce friction and enable more freedom for the home-owning public:

You have a large population in this country that is composed of retirees and they don’t have a current income, so they cannot actually refinance their mortgage and they’re still paying interest at 6%. They’d like to move to a warmer climate. Well, they can’t, it’s gonna cost them 6% to sell their house, then it’s gonna cost them 6% to buy the other house.

Why can’t they set it up so they sell 1% of their house in Connecticut every year and establish an income stream that qualifies them to go get a cheap mortgage and sell that house in Connecticut over a period of time, to someone who wants to live there and buy a piece of property in Florida.

There are all these frictions and it’s honestly just a simple data-matching problem. There’s no reason you need to own 100% of your home. What if we could give you the ability to sell 10% a year or 3% of your home or 2% of your home to people who want to buy a home in your neighborhood and are not ready yet because they’re renting.

For a more detailed overview of Better’s upcoming SPAC and its product plans once it goes public, check out our feature on ExtraCrunch.

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