Peer-to-Peer Market Moving into Property
Posted on 20.11.2013, by Rob Warlow
The crowdfunding and peer-to-peer (P2P) loan market has been very much focused on providing short to medium term loans for traditional business needs such as additional working capital and asset/equipment purchases.
However, in a sign that the P2P market is maturing, some players are starting to venture into property funding.
Funding Circle, the most recognised marketplace for business loans, has signalled its intent to move into the property finance space, with the hire of Luke Jooste, formerly Commercial Director at Barclays Business. With an extensive experience in the property sector Luke has been brought in by Funding Circle to develop a property-focused offering.
Depending on what exactly the product is it should be a good source of property funding and will be music to the ears of businesses operating in this industry who have been badly serviced by the traditional High Street banks. I suspect the service will initially focus on secured bridging loans which is an easy toe in the water.
The P2P bridging market though does have a new confirmed entrant. Existing bridging lender Wellesley has launched a peer-to-peer lending service with the aim of funding its short-term loans.
Private investors will be able to fund bridging and development property loans of up to £1m. The shareholders of Wellesley are committing £5m so they will invest along side private investors.
The property being funded will be taken as security and sold if borrowers default. In this instance, the private lenders will be paid off first, with Wellesley’s shareholders being repaid from the remainder.
You can find out more here, Wellesley