JUSTUS is planning to launch residential owner-occupied mortgage products within the next three months, after a rule change came into effect this week.
In its long-awaited final rules on the sector, the Financial Conduct Authority confirmed that peer-to-peer lenders would be regulated under home finance rules. This means that consumers will receive the same level of protection as they would from conventional residential mortgage providers.
The FCA said that “from 4 June 2019, [it is] applying the Mortgage and Home Finance Conduct of Business sourcebook (MCOB) and other Handbook requirements to P2P platforms that offer
home finance products, where at least one of the investors is not an authorised
home finance provider.”
Read more: JustUs gears up to enter P2P mortgage market
Lee Birkett, founder of P2P platform JustUs, said the firm is “over the moon” with the regulator’s decision.
“We’re designing products as we speak,” he told Peer2Peer Finance News.
“We’re doing some test cases now and planning to launch our first products within the next two to three months.”
Birkett expects there to be a huge appetite for P2P residential owner-occupied mortgages.
“This is the biggest [lending] market in the world – far bigger than business lending,” he said.
Birkett said the rule change paved the way for P2P lenders to disrupt the mortgage market, as it “puts the power of mortgages into the hands of the people”.
Its residential owner-occupied mortgage products will be ISA-eligible, Birkett said.
Industry commentators have suggested that owner-occupied mortgages may not be a suitable product for the P2P sector due to their very long duration, which may not be popular with investors.
However, Birkett said that JustUs has a “very liquid” secondary market and added that the underlying assets would be very attractive for investors.