A review of the buy-to-let industry has been conducted with positive results for Peer-to-Peer. The Wrigglesworth Consultancy has found that “population growth combined with a weak home building response mean the phenomenon of buy-to-let would survive a new recession”, however, buy-to-let finance is more expensive for landlords than owner occupiers, which has “left a gap for P2P mortgage lenders.”
In September, the Financial Times reported on Crowdfunding and Peer-to-Peer lending’s involvement in the property market, and how “grassroots microfinance websites” were on the brink of changing the buy-to-let industry in particular. The Chief Executive of Landbay, who commissioned the research, elaborated on how “the mortgage world has changed. Now everyone has access to the sorts of markets that were once the preserve of large financial institutions.”
Wellesley & Co. conducted the largest property P2P loan of £10.8m through property developer, Kersfield, in April this year. Burwalls, a historic and iconic building in Bristol, will be transformed with the funds. David Newton of Kersfield praised the platform, and Peer-to-Peer’s involvement in the industry in general, for helping “small developers to secure funding”. “The option of Peer-to-Peer finance was extremely attractive as it is quicker, more flexible and often with better commercial terms than traditional lenders.” Banks have also been reportedly reluctant to lend to developments in “regional cities”. With many borrowers seeking to develop property outside of London, there is plenty of demand for alternative methods of finance. Wellesley recently funded a development on Princess Street in Manchester, The borrower, Stephen Beech, is creating 35 new apartments in the derelict building, and described the borrowing experience as “fully supportive throughout”. The project is monitored throughout its development, and is expected to be completed in January 2015.
To find out more about borrowing opportunities, and to see some case studies of other developments that Wellesley & Co. have funded, click here.