RateSetter closes one-year market following Shawbrook deal

RateSetter will close off its one-year market on 15 January 2021, following the sale of the peer-to-peer lending platform’s development finance loans to Shawbrook Bank.

The one-year market was used primarily to fund property development loans. Its closure will mark RateSetter’s official exit from the development finance space.

In a blog post on its website, RateSetter confirmed that it has sold its portfolio of property development loans to Shawbrook Bank.

The portfolio is believed to be worth £120m, with a further £47m of future expected drawdowns for the projects in the portfolio.

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“The sale follows the announcement in August that RateSetter will focus on consumer finance,” said RateSetter in the blog post.

“We have written to all [one-year market] investors with more details – investors will receive their capital in full plus accrued interest. Post the sale, the provision fund interest coverage ratio is expected to increase slightly.”

RateSetter began property lending in 2013 and since then it has provided more than £500m of finance to small- and medium-sized enterprise (SME) property developers.

Earlier today (17 December), it was announced that Shawbrook Bank has acquired RateSetter’s development finance portfolio for an undisclosed amount, along with the platform’s development finance team.

The latest acquisition comes three months after Metro Bank completed its acquisition of RateSetter’s unsecured personal loan business.