The managing director of FutureBricks has claimed that with Covid-19 delaying more than 300,000 homes being built and causing caution among high street lenders, alternative finance is needed more than ever to help finance housebuilding.
Arya Taware cited a study from property agency Savills and housing charity Shelter that found more than 300,000 planned homes may remain in the planning stage over the next five years as a result of the pandemic.
She highlighted the Institute for Public Policy Research think tank’s prediction that 116,000 construction jobs could be lost by 2020-2021 due to the stalling of housebuilding, which she said would only deepen the UK housing crisis.
Taware also pointed to a survey from the Home Builders Federation that revealed one in five developers considers access to finance a major barrier to housing delivery, showing that there is significant need for funding.
She said that with many high street lenders continuing to tighten their eligibility criteria, many small- and medium-sized enterprise (SME) housebuilders turn to alternative finance for help.
Taware claimed that many alternative finance lenders offer borrowers a greater array of funds and product choice by providing access to funds from both retail investors and corporate entities when backing a loan.
Peer-to-peer property lender FutureBricks has backed more than £1.8m in development loans this year alone, an 80 per cent increase in the platform’s deployed funds compared to 2019.
“There are still many projects of quality in need for funding in the market today despite the coronavirus pandemic,” said Taware.
“We are proud to be in a fortunate position that allows us to continue to support the SME housebuilding sector through the coronavirus pandemic.”
Taware said the platform’s ongoing crowdfunding campaign on Seedrs will help it enter the next phase of growth.
The platform set an initial fundraising target of £320,000, but 24 hours after the campaign went live to private investors on crowdfunding platform Seedrs, it had surpassed this with more than £340,000 raised.
The platform has previously said that it will utilise the government’s future fund to double the funds raised from the campaign, which is now open to the genial public.