Assetz chief highlights private investors’ support for housebuilding sector
Assetz Capital chief Stuart Law has said that policy makers need to recognise the role that private investors play in supporting the housebuilding sector.
Law (pictured) said that private investors are “primed and ready” to support the construction and housebuilding industries, and noted that they already enable the delivery of thousands of new homes each year.
There are a number of peer-to-peer lending platforms that connect individual investors with housebuilding opportunities, including Assetz Capital, CrowdProperty and LandlordInvest.
“Businesses, the finance sector, and policy makers need to recognise that private investors can, and already do act as a significant source of capital for the construction industry, enabling the delivery of thousands of new homes each year,” said Law.
“In the current climate, where house prices continue to rise, business costs are soaring and the cost of living is rising exponentially, we need to make use of all financial levers, private and public, to support business growth for small- and medium-sized enterprises (SMEs) and deliver more quality, affordable homes for the people that need them most.”
Law said that more than 40,000 private investors have used the Assetz platforms to fund SME housebuilders, and he expects lending to rise to £1.5bn by 2023.
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Law’s comments come as the latest data from the Office for National Statistics showed that construction output dropped by 0.1 per cent in February, the first monthly decline since October last year.
However, this was still 1.1 per cent above February 2020’s pre-pandemic level, and output rose by 2.4 per cent in the three months to February.
Law said that the monthly data always fluctuates, particularly over the winter and into spring when the weather has a larger impact on construction projects.
He said it is “promising” that output is above pre-Covid levels, and that the three-monthly series’ figures are trending in the right direction.
Law predicted further growth in March’s figures but said that structural issues, such as a “complex, time-consuming” planning system and disrupted supply chains, remain.
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“We would expect to see further growth in next month’s figures as March will have been the first full month in which the industry has been able to operate without legal coronavirus restrictions since the start of the pandemic,” Law said.
“While we welcome all green shoots of growth, output remains muted, especially if we consider the figures against demand for new homes and the full potential of the market.”
Law noted continued challenges for the housing market, such as Brexit, the pandemic and the war in Ukraine, which make it harder and more expensive to source labour and materials.
“At the same time soaring fuel prices, the price of land, and the costs associated with the UK’s complex, time-consuming planning system, are all long-term problems that, unless tackled, will prevent the market from reaching its potential,” Law added.
“As is always the case, these factors disproportionately impact SMEs, which do not have access to the kind of capital needed to push through significant short-term financial challenges and struggle to secure funding from the big banks.”