CapitalStackers has predicted a correction rather than a crash in the property market, and has reassured lenders that it is lending their money against homes, while someone else is taking the equity risk.
The peer-to-peer property lending platform said for now, market conditions do not point to any further big house price rises and stagnation is looking more likely.
CapitalStackers said that the war in Ukraine and continuing pandemic-related supply chain problems means the recent stellar performance of the market is almost certainly not going to continue and will be replaced by only modest growth, or even a modest fall.
The platform said that it takes longer and costs more to sell a property than shares, which means it is unlikely panic will grip the property market in the way it often does in the stock market.
CapitalStackers said people usually invest in property for the long haul, so landlords are normally expected to bear quite a lot of pain before they are pushed to sell, which makes a housing crash less likely than a stock market crash.
The platform also reassured lenders it is lending their money against the sale of homes, rather than taking equity.
“In short, if we were to use a C-word, the portents point to ‘correction’ rather than ‘crash’,” CapitalStackers said in a blog on its website.
“But however the future unfolds, the good news for us and for you, our investors, is that we’re not selling houses – we’re lending money against them. And someone else is taking the equity risk.”
CapitalStackers added that the good news for investors is that price growth has been “significantly higher” for new build properties.
The platform cited Land Registry data that showed the average price for a new build grew by 19.3 per cent year-on-year to reach £352,909 in December.