Development P2P lenders welcome planning permission changes
Peer-to-peer lending platforms which focus on property development loans expect the government’s permitted development changes to lead to a rise in business from small– and medium-sized enterprise (SME) borrowers.
On 1 August, new rules were introduced allowing two-storey extensions to blocks of flats. And from September, new legislation will remove the requirement for planning permission when demolishing unused commercial properties to build residential homes in their place.
Development P2P lending platforms have welcomed the changes and have forecast an increase in business from SME borrowers as a result.
Mike Bristow, chief executive of CrowdProperty, said that last year the platform conducted a huge survey to SME property developers which found their third biggest barrier was the planning system.
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“If you unlock the planning system and make it more straightforward and easier, with sensible constraints such as still protecting listed buildings, and relax some of the bureaucracy and red tape, this country will build more homes as a result,” Bristow said.
“These are widescale changes being made that will encourage housebuilding.
“More homes will be built, and they will need to be funded so more business will come our way. The overall market will grow, and we’ll continue to grow our share of that market.”
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Graham Martin, head of lender relationships at Invest & Fund, said trying to organise planning takes time and money which favours the bigger housebuilders.
“If you can make that process a lot easier, there won’t be as many barriers for SMEs,” he said.
“That’s an opportunity and we expect to take market share from SMEs.”
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Yann Murciano, chief executive of Blend Network, said the changes will cut out a lot of red tape and make it easier for experienced small property developers to push through projects.
“It will make it a lot quicker,” he said.
“We definitely expect more business from SMEs. We expect to see a lot more conversion of unused commercial into residential and for SMEs it’s really good.
“Commercial to residential conversions requires more specialist lenders like platforms like us, that understand the area and the projects.”
