Peer-to-peer lending platforms say they have not yet seen the full benefits from the government’s new permitted development (PD) changes.
On 1 August 2020, new rules were introduced allowing two-storey extensions to blocks of flats.
And from September, new legislation removed the requirement for planning permission when demolishing unused commercial properties to build residential homes in their place.
In August, P2P development lending platforms welcomed the changes and predicted an increase in business from small- and medium-sized enterprise borrowers as a result.
However, they now believe its too early to see, or difficult to tell, whether the full benefits have been felt.
Read more: Future trends in P2P property lending
“It’s a little early to see significant change,” said Stuart Law, chief executive of Assetz Capital.
“We’re a very big business and see trends and have yet to see a substantial change in permitted development rights (PDR) performance but we fully expect to see this.
“PDR has been a successful part of our strategy but often occurs in city centres and they are areas suffering downwards pressure as people look to move out and I think that will continue.
“Reduced office demand will lead to more conversions to residential but we don’t want more supply over demand.
“When everything goes back to a new normal, there won’t be the same number of people working in city centres so demand to live these areas will be reduced somewhat going forward.”
Meanwhile, Yann Murciano, chief executive of Blend Network, said the P2P property platform’s underwriters have been busier than ever reviewing deals but it’s difficult to say how much of this is due to the PD changes.
“We also have had our record months of lending, so enquiries are definitely up from property developers and investors looking to do conversions,” he said.
“It’s hard to say how much is due to PD changes and how much not. But the market has definitely been on fire following the stamp duty and PD changes over the summer. Lately it has slowed a little.
“I think the market will slow a little from the strength we say over the summer and even into September/October. Now, unemployment is starting to hit.”