Peer-to-peer lender LendInvest on track to back £1bn of new properties by 2016
Peer-to-peer (P2P) property lending and investment firm LendInvest said it has doubled the number of properties it has supplied finance to over the last year, as developers scramble to keep up with demand for more homes.
The alternative lender, which aims to plug the funding gap left by high street banks, has backed 1,222 new properties since the start of 2015 compared with 2014’s total of 663 units, which is equal to one per cent of privately developed homes in the UK.
It expects the total valuation of properties funded to date to break the £1bn mark by early 2016 and to fund more than 1,500 new properties in 2016.
Founded by entrepreneurs Christian Faes and Ian Thomas, LendInvest was spun out of their bridging finance business Montello in 2013 and is now the fourth largest P2P lender in the UK.
It has helped provide £430m of loans to small scale developers and professional landlords since its launch and recently recorded its second annual profit of £3.1m.
Developers typically borrow between £500,000 and £5m and create 1 to 15 units. The majority of LendInvest-backed properties are two or three bed houses, sold for £100,000 upwards.
Faes, LendInvest’s chief executive said: “In a market where there are a dozen house hunters for every property and major house builders don’t intend necessarily to increase the number of units they built year on year, the country urgently needs housing stock from alternative sources.
“Every housing development is underpinned by access to finance. Without the funds, builders cannot build. Where the cost of capital restricts the banks, alternative lenders must fill the void.”