CrowdProperty has been providing finance since 2014 and, in the last three years, has seen a huge growth in its lending levels.
In late October 2019, DFT revealed that the platform had surpassed the £50m mark, having funded the construction of 700 homes.
It has, to date, lent £97.7m and expects to reach £100m within the next two weeks.
CrowdProperty has been able to continue funding throughout the Covid-19 crisis, which CEO Mike Bristow says has attracted a rise in new applicants.
In an exclusive filmed interview with DFT, Mike divulges that CrowdProperty is constantly adding funding sources to its platform, especially on the institutional side.
“We believe [that] diverse sources of capital build a more robust and reliable business [for] our customers,” he states.
He explains it has a “very scalable platform” with an “incredible data set” due to billions of pounds worth of applications.
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- CrowdProperty surpasses £50m in lending
As a result, Mike is confident that it could expand to provide £400m-plus of lending per annum by 2024 — “we’ve got big ambitions”.
“Front and centre in our strategy is building a highly scalable and ever-enhancing platform to enable that and [to] never put operational drag on our business because, ultimately, that could compromise customer service and responses.”
He reveals that the lender has seen a lot of demand over the past six months for its development finish and exit product, and, going forward, it expects to fund more airspace developments as a result of the recent PDR changes.
“There’s a huge opportunity there,” he states, explaining that there is an underlying macro trend for the densification of cities to unlock housing, and that “permitted development will enhance that significantly.”
DFT asked whether the lender would see a surge in enquiries as a result of these extended rights, to which Mike responds, “definitely”.
“…We really want to unlock the power of SME developers in this country, because [their output] has dropped shockingly,” he highlights.
“Some of these permitted development proposals are so opportunistic for the entrepreneurial SME developer heartland that could build tens of thousands of units,” he said, adding that CrowdProperty’s aim is to support the creativity of these nimble housebuilders.
To reach housing targets, Mike urges that it has to come from SMEs, which will equate to more economic activity.
“Labour, materials, services — all of those have direct job implications,” he says.
“This is what the sector can do: finally build enough homes and drive a hell of a lot of spend into the UK economy to really support [it] right now, and that should be actively encouraged.”
Looking forward to what the development and bridging landscape will look like in 2021, Mike predicts that some loan books will be “really challenged”, which could ultimately take time away from businesses towards new lending.
He claims that there have been “a lot of instances” in the market where reliability has not played through, resulting in reputational damage that will last “for years”.
“I think [the] supply side of capital in terms of the number of lenders will be down,” he believes. “…You’ll find a lot of institutional capital concentrating into quality because there’s a strong proof point of major economic shock that will prove underwriting decision making.
“That aligns perfectly [with] our ambitions — we are saying that we will attract more institutional capital onto our platform, it will be a less competitive market, there will be a flight to quality, there’s a reputational focus on who’s reliable when times get tough, and all of those factors play very well into the future of CrowdProperty.”
The full interview can be watched below.