Property peer-to-peer lending platforms will be vital to the government’s plan to build the nation’s way to economic recovery, industry stakeholders have claimed.
Earlier today (30 June), Prime Minister Boris Johnson announced his “New Deal” which puts jobs and infrastructure at the centre of the government’s economic growth strategy.
He said the government will bring forward £5bn of capital investment projects, supporting jobs and the economic recovery.
This includes: £1.5bn for hospital maintenance and buildings, over £1bn for 50 projects under a school rebuilding programme, £900m for local growth projects, £560m and £200m for repairs and upgrades for schools and colleges, £142m for digital upgrades and maintenance to around 100 courts and £100m for 29 road network projects.
“We will build, build, build,” Johnson said. “Build back better, build back greener, build back faster and to do that at the pace that this moment requires.”
Property-backed P2P lending platforms welcomed the government’s plans and said that alternative lenders will be vital to the nation’s recovery.
“Johnson’s message is the same message we’ve always talked about,” said Mike Brsitow, chief executive of CrowdProperty.
“Some of his words are similar to that on our blogs. It’s all about building, whether HS2, building more home homes, it’s exactly what we’ve been saying for months and arguably years.
“P2P property lending platforms are of huge importance to the recovery. In our case, the small- and medium-sized enterprise (SME) property developer has been underserved by years from traditional sources of funding, so we built a system to make it economically viable to support them and we know that asset class well because we’ve been investors and developers in that space.
“And each home you build is about £200,000 spent on labour, materials and services.”
Yann Murciano, chief executive of Blend Network, said P2P lenders can and must be part of the solution.
“At a time when large-scale public borrowing will see an astonishing fall in public finances, I believe there will be renewed and indeed increased pressure for the government to consider new and innovative sources of funding, including P2P property lending, to tackle the housing shortage,” he said.
“With the number of houses needed being so high and the housing shortage in all likelihood being exacerbated, we believe that all avenues must be explored.
“Due to their nimbler size and the lack of heavy legacy processes, alternative lenders are able to move faster at a time when traditional lenders are being inundated with loan requests.
“The answer, I believe, is for the government to support alternative lenders working closely with traditional lenders to help SMEs and housebuilders at a time of national emergency.”
Carl Davies, chief operating officer of The House Crowd, said that P2P property platforms are vital in providing development finance to developers who have ‘lendable’ projects but whose criteria put the projects outside the mainstream bank’s ‘bankable’ credit policy.
“This creates an opportunity for private investors to lend directly to well-curated projects from experienced developers via platforms which can provide all the due diligence and security that individuals might not be able to do directly themselves,” said Davies.