Peer-to-peer lender Property Pact has had its launch derailed by coronavirus but is still hopeful it can play its part in helping first-time buyers and homeowners climb onto and up the property ladder.
The Financial Conduct Authority (FCA) regulated platform enables investors to fund mortgage deposits for would-be homebuyers. Its founder, Errol Woodhouse, said the platform spent much of last year bringing mortgage lenders on board who were satisfied with allowing P2P-funded deposits, as long as borrowers still meet the affordability criteria.
“There had been lots of conversations with the FCA and we had done a lot of work on restructuring the website and finding mortgage lenders that were willing to work with us,” Woodhouse told Peer2Peer Finance News. “Then coronavirus kicked off.
“We were going for a relaunch in the next six months, now I am still hopeful, but we don’t know when it will be.”
Property Pact had been talking to institutional investors about funding large tranches of money for deposits, he added. Most P2P property lenders have avoided funding residential mortgages due to their long loan terms, but Property Pact focuses on funding the deposit. Essentially borrowers end up with a Property Pact loan to repay on their deposit, alongside the actual mortgage.
Investors have a restriction – or equivalent of a second charge – that means they can take legal action in the case of any defaults.