The statement was made during a filmed interview with Development Finance Today, in response to a question about how a fragmented development lending market impacts transparency.

“Because it’s an unregulated market, there’s a massive lack of transparency,” he said. 

Yann pointed to a scenario where terms from one lender may be issued at 9% with rolled-up interest, while another could offer 8.5% with retained interest but, if the broker doesn’t present this to the customer in the right way, the 8.5% product might look more attractive.

“[It is actually] more expensive, because on the retained interest loan, you pay interest and fees on the interest you’re borrowing.”

He added that while a competitive market should be a good thing for property developers, he claimed this isn’t always the case, due to a lack of openness and standardisation of terms issued by lenders.

•   DFT to host virtual roundtable with Adair and FRP Restructuring Advisory on avoiding and handling development pitfalls
•   Blend funds its largest ever project
•   Blend teams up with Rockstar Property Group to host webinar on funding HMO projects via P2P

“We think one way to solve the problem is by having some regulation come into the market,” he suggested. 

In April, Blend Network was approved by the FCA for direct authorisation and Yann believes this move will help further enhance borrower trust in the business.

It followed the launch of a new, revised product matrix, and the business doubling its lending volume in 2020.

It is on track to more than double its loan advances again this year.

The full interview can be viewed, below.