The CEO of the online p2p buy-to-let platform says he is sanguine the firm can see strong origination growth in 2017 despite the challenges posed since Brexit.
Brexit should not pose a significant threat to strong growth in p2p buy-to-let lending and investing, according to John Goodall, chief executive officer at Landbay.
In the eight weeks since the European referendum, market panic particularly in some property mutual funds saw initial pandemonium followed by - at best - measured caution from investors.
While this was an upset in the secondary market for property investors, via open-ended comercial property funds whose unit prices fell rather than the underlying value of the property crashing, few would argue Brexit will not pose huge challenges for the UK property market both commercial and residential.
For Landbay, which offers investors exposure to p2p funded buy-to-let mortgages, the outlook is still bullish, Goodall argues. This is because institutional investors will want to reduce exposure to consumer lending, he says, and the government is unlikely to anything that further upsets the housing market or has any negative impact on housebuilders.
“I think this is - bizarrely - a period of business as usual,” he told AltFi last week. "There was definitely a two-week period after Brexit where it was the case that everyone was asking what was going to happen and both borrowers and investors...well everything was on pause for two weeks or so."
“Now, certainly from the second half of July, it is almost the case of not much has changed and the world is not going to cave in. Brexit...hasn't had an impact yet apart from the interest rate cut but that hasn't really phased through into buy-to-let mortgages and I think it would be hard for buy-to-let mortgages to become much cheaper,” he added.
Goodall believes the next few years will see strong growth for Landbay nonetheless with more institutional money allowing the firm to scale. The platform mostly facilities retail money at present.
“We have definitely been restricted to date but we expect to deploy a lot more next year than we will have done this year. Part of that is the macro environment whereby people are looking for a lower risk type.”
Landbay annouced a tie-up with Zoopla in January but as of yet has not been forthcoming with how the new capital will be deployed. However, he says in 2017 the firm are aiming to originate £120-150m and then double this in 2018 and again in 2019.
"The important thing for us is to not do growth for growth's sake...if we don't take shortcuts then in we can lend £1bn in 2020,” Goodall said.