LendInvest has provided finance for approximately 1% of all privately developed homes in the UK this year.
The UK-based buy-to-let mortgage and property development lender has financed 1,222 new buildings in the UK since the start of 2015 – close to double its 2014 total of 663 units. AltFi Data indicates that LendInvest has lent a little under £250m over that stretch, and is now beginning to make a dent on the UK economy, having funded 1% of all privately developed UK homes in 2015 (according to ONS figures).
LendInvest purveys a range of products that include bridging loans, development loans and 3 year buy-to-let loans. LendInvest has indicated that a typical developer will borrow between £500k and £5m from the platform – and go on to create between 1 and 15 units. That borrower will also be an experienced property professional, whose developments are his primary source of income.
But why has LendInvest chosen to reveal these facts and figures now? Could it have something to do with last week’s Autumn Statement, which raised the Stamp Duty Land Tax (SDLT) by 3%? Perhaps. The 3% hike has been cited a means of further professionalising the landlord and developer market – by sifting part-time landlords out of the space. Here’s how LendInvest Co-Founder Ian Thomas reacted to the raising of the SDLT:
“Any landlord will be impacted by this change next time he looks to buy or sell, but the most professional landlords should be able to mitigate some of the impact by planning carefully and thinking long term about their rental portfolios.”
LendInvest seems intent on clarifying that its customer base is comprised of exactly these sorts of “professional landlords”, and that the platform will not be negatively impacted by Osborne’s 3% hike.
These sorts of corporate growth stories are not uncommon within the heady world of alternative finance, but this one stands out from the crowd owing to the focus on LendInvest’s impact within the broader property finance sector. Financing 1% of all privately developed UK homes in 2015 is not to be sniffed at. Especially when you consider that the platform expects to fund over 1,500 new properties in 2016, and boasts a year-to-date growth rate of 144.60%, according to the Liberum AltFi Volume Index UK.
“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.”
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.