BANKS are increasingly comfortable using peer-to-peer lenders for property deals, says Yann Murciano, chief executive of Blend Network.
The P2P platform, which launched in January, offers asset-backed property loans to retail and high-net-worth individuals, as well as hedge funds and other institutional investors.
Murciano, a former Morgan Stanley executive, told Peer2Peer Finance News that they are seeing larger volumes of business from banks on both sides of deals.
“We’re finding that we’re not really competing with the banks, we are more taking the business the banks don’t do anymore,” said Murciano.
“What’s interesting is that now private banks are coming to us looking to deploy money on our platform.
“They are keen to lend on our platform so on the investor side we have banks and on the other side we are talking to banks who are looking to refer deals to us.
“This shows how alternative lenders are becoming more part of the ecosystem as we connect banks with private banks.
“We’re in a really positive position and the market is changing and allowing P2P to connect not just peers but more sophisticated deals.
“The banks see P2P as a more mature asset and are keener to deploy their money there.”
Since launching at the start of the year Blend Network has made over £3m of loans with an average return of 12 per cent.
The platform focusses its lending on small, regional property developers and has an average 60 per cent loan-to-value on its investments.
“We’re very focussed on lending to the residential property market outside of London,” said Murciano.
“We like to lend in the regions for affordable housing where supply is quite tight and there’s great demand.
“The government says it wants to build 300,000 new houses a year but we’re not anywhere close to that.
“At the moment it is more like 80,000 new houses a year and one of the big issues is getting the finance. We’re focussed on the smaller developers.”