A new name has surfaced in the online real estate funding space.
InvestSure is the latest platform to enter into the increasingly packed world of online lending for real estate projects. The firm will match professional investors with a wide range of investment opportunities, including property development loans, land and property investment projects and corporate bonds. InvestSure will specifically target small and medium sized developers, who are increasingly struggling to secure funding on favourable terms.
InvestSure – in much the style of existing alternative finance providers – points to speed and efficiency as the core benefits of the offering for prospective borrowers. The platform has also indicated that development projects will be made viewable only to registered investors – not to other developers. Brokers and intermediaries are also able to make use of the platform, splitting fees with InvestSure.
InvestSure will position itself as a “pro-to-pro” network, rather than as a peer-to-peer operation. Projects will be made available only to “cash-rich” investors, presumably negating the need for FCA authorisation. InvestSure has advised that both investors and developers will be able to sign up to the network for free until the end of 2016 – which would imply that a registration fee will be charged thereafter.
2015 saw total UK alternative finance origination volumes grow 75.7% year on year. The fastest growing segment of the space was loans secured against property, which delivered 96% year on year growth. The challenge will be for InvestSure to carve out a space for itself within what is an increasingly competitive market.
Janine Lewis, CEO and founder of InvestSure, offered her thoughts:
“The UK property market has been seriously dysfunctional for some time. Since 2007, bank lending has been limited to 65 per cent loan-to-cost at best, leaving developers to bridge the gap. This prevents them from moving quickly, and as a result activity has been opportunistic and sporadic. It has also placed an inordinate amount of power in the hands of investors, diminishing profits. The InvestSure platform will rebalance this relationship, allowing developers to gain exposure to numerous investors competing to fund projects, making the process quicker and more efficient.
“This is sorely needed. We are in the midst of a housing crisis, one that cannot be solved by large developers alone. The money is out there: there are plenty of professional investors out there willing and able to fund these projects. InvestSure can connect these two groups together in an efficient, convenient, and mutually beneficial way.”
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.