As an alternative (or non-bank) lender, LendInvest says it is plugging the funding gap left by high street banks that have either not returned to the small-scale bridging and development finance markets since 2008, or have done so with a significantly reduced appetite to lend.
Despite its younger funding base, LendInvest is also competing with UK house builders on their ability to provide sufficient numbers of new properties to the market every year.
In the past year LendInvest has lent over £250 million to borrowers that have created new housing supply. The typical LendInvest developer borrows from £500,000 to £5 million and creates 1 to 15 units. The majority of LendInvest-backed properties are two or three bed houses, sold for £100,000 upwards.
The company expects the total valuation of properties funded to date to exceed £1 billion by early 2016 and expects to fund more than 1,500 new properties in 2016.
Christian Faes, Co-Founder & CEO of LendInvest, commented:
“The massive shortage of new housing is pushing up house prices across the country. The crisis we are encountering is born out of simple supply vs demand economics, the result of which is that owning a house is out of reach of much of today’s younger generation. Creating new housing goes directly towards addressing this issue, and LendInvest is proud to be part of the solution to the housing market in the UK.
“After only 30 months in business, LendInvest will supply essential financial backing for around 1% of all privately developed homes in the UK this year.
“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.”
The company recently recorded its second annual profit of £3.1 million after two years’ trading, and is currently the only P2P platform to have been rated by an independent regulated credit agency.
