Property lender FutureBricks has made the decision to leave the peer-to-peer lending space due to the “regulatory burden”.
It will no longer offer new P2P loans, but may instead launch a new and unregulated product aimed at certified sophisticated investor and high net worth investors only.
Borrowers loan terms will remain unchanged, and all investors will receive their capital and interest due by the date of the repayment.
The investor ‘top up’ and ‘invest’ functions have now been disabled, and lenders have been told to withdraw any uninvested funds from their e-wallet as soon as possible.
Existing investments will remain invested until an exit is provided.
Read more: P2P property: Rolling with the punches
The decision was made after the Financial Conduct Authority (FCA) released a discussion paper in April 2021, outlining a series of new regulatory changes.
After reading the proposals, the platform decided to wind down its P2P operations. Once this process has been completed, the company will no longer be regulated by the FCA, and will also end its appointed representative arrangement with Resolution Compliance.
“FutureBricks is effectively exiting the P2P sector and is in the process of being deregulated with the aim of finalising this by the end of July,” the company said in an email to investors.
“FutureBricks finds the intended set of restrictions from the FCA inhospitable for long-term business growth. The limitations of online presence for P2P companies with added administration for every piece of content to be published makes it not conducive for business.
“The synergy of all requirements likely to be put into motion are hindering commercial viability.”
Earlier this year, the company hinted that it was preparing to pivot to an institutional lending model, and announced plans to build a one-stop-platform for housebuilders.