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Peer2Peer Finance News | August 23, 2019

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UK supermarkets’ property slump creates P2P opportunities

UK supermarkets’ property slump creates P2P opportunities
Anna Brunetti

UK SUPERMARKETS are scaling back their property holdings, creating vast opportunities for developers and peer-to-peer lenders to fill the gap.

The recent online retail boom has forced supermarkets to sell off their property portfolios, which have seen their value plunge by 17 per cent – or £6.5bn – over the last two years.

This could provide property developers with the right conditions to tackle the housing dearth across the country, if they join forces with alternative lenders, said Saving Stream.

The P2P platform, which specialises in property lending, cited Tesco’s lumpy sale of 14 unwanted sites for potential residential conversion into 10,000 homes in 2015, as part of its plans to offload almost 50 redundant sites.

Read more: Government accused of mismatched policy for property SMEs

“There is an acute need for new housing in many parts of the UK and smaller developers can play a vital role in helping to meet that demand,” said Liam Brooke, chief executive of the firm’s owner Lendy.

“However, funding constraints remain a critical issue hampering developers’ ability to take advantage of these new opportunities coming to market.”

Based on the Bank of England’s data, lending by UK banks to property developers more than halved in two years, falling to £14.9bn in April 2016.

Read more: Saving Stream warns of commercial property “funding gap”

“This is where P2P could be a powerful tool, harnessing the investment power of private investors searching for decent returns,” Brooke said.

“Using a P2P platform rather than a traditional bank will mean that decisions and access to funds will happen as efficiently and quickly as possible. Developers will also have access to experienced and specialised credit assessors, who will properly understand the risks involved in their project.

“Funding these kinds of assets could be very rewarding for P2P investors, enabling them to gain access to highly attractive property investments in good locations.”

Read more: Relendex calls for housing white paper to unwrap SIPPS for residential property