Research reveals real estate professionals expect banks to become less willing to lend to property developers

Posted October 1, 2019

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Research reveals real estate professionals expect banks to become less willing to lend to property developers

New research* that we commissioned reveals that 37% of real estate professionals believe property developers will find it harder to secure funding from banks over the next two years, compared to just 27% who think it will become easier.

This helps explain why 60% believe property investment platforms and challenger banks will take market share from traditional lenders in the property development finance market.

Of those who believe it will become harder to secure property development finance from mainstream lenders, 82% said it will be because of difficulties caused by Brexit, and 55% said it will be due to the financial health of mainstream lenders coming under greater pressure.

Property investment platforms to gain market share in property development finance sector

In the first six months of this year, we achieved a 149% increase in property funding on our site when compared to the same period in 2018. We have a highly experienced team with a very strong focus on risk, which means we reject around 80% to 90% of loan applications. To date, we has not experienced any defaults.

Our CEO Brad Bauman said: “Property investment platforms are growing their market share of the real estate development finance market and our research suggests this could be further fuelled by traditional lenders becoming less able to lend in this sector.

“While, there are many different property investment platforms for investors to choose from, they need to ensure they are comfortable with the ones they use in terms of their experience of the real estate market, their focus on risk management and their track record for delivering competitive risk-adjusted returns.”

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Fitzrovia Finance launched to institutional investors in Sep 2017, and in May this year we opened our doors to private investors, who from an investment of £1,000, can benefit from attractive risk-adjusted returns of up to 5.5% p.a.**

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These survey findings have been featured in; buildingconstructiondesign.co.uk, landlordtoday.co.uk, hbdonline.co.uk and paminsight.com amoung others.

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*The research company PollRight interviewed 32 real estate professionals during June and July 2019.

** The indicated return is an estimate that investors can earn, after fees but before bad debt and tax. View our platform statistics for more detail.