JP Morgan grows UK buy-to-let residential exposure with £500m investment

The US investment bank has provided funding to specialist debt provider LendInvest to back its mortgage lending strategy.

JP Morgan has broadened its access to UK real estate lending by backing London-based specialist property debt platform LendInvest’s UK buy-to-let residential mortgage business.

The US investment bank has provided a £500 million (€564.2 million) credit line to fund UK home loans originated by LendInvest. Eric Wragge, managing director of securitised products in JP Morgan’s London office, said in a statement released on 28 January announcing the deal: “There is a huge amount of innovation going on in the UK fintech space, which is taking place in spite of and in response to the covid-19 pandemic.”

LendInvest will use the new facility to finance buyers of existing residential properties that will be leased. LendInvest has lent more than £3.5 billion to the sector via its online debt platform since inception a decade ago.

The deal demonstrates a growing interest from global financial institutions to team up with UK fintech. LendInvest has previously secured the backing of major capital providers. In April 2019, it signed a deal with UK bank HSBC to provide £200 million of funding for home mortgages.

Rod Lockhart, chief executive of LendInvest, said about this latest transaction: “Working with JP Morgan puts us in a stronger position than ever to serve our customers in what will come to be a hugely important year for the industry.”

In March, amid the market turmoil caused by the coronavirus pandemic, the specialist lender announced the closing of a £285 million securitisation of loans provided to UK buy-to-let landlords in a deal arranged by US bank Citi.

The firm first turned to the RMBS market in June 2019, when it securitised £259 million of residential mortgages in a deal that its then-chief executive Christian Faes said provided it with “funding that is cheaper than if we were a small deposit-taking bank”.

Despite the market turmoil brought about by the coronavirus pandemic, the lender has managed to deliver growth. In December, the firm published its interim financial results covering the period from April to September 2020, which showed its loan book had grown 27 percent to £1.4 billion.