Specialist UK debt provider LendInvest has reported 2017 lending volumes of £500 million (€563 million), up 33 percent on the previous year’s total.
Reflecting the changing nature of the niche UK real estate lending sector, the firm attributed the increase in activity to its strategy to increase the breadth of its lending products to offer tailored loans to distinct categories of borrowers.
In November 2017, US bank Citi provided a warehouse funding facility to LendInvest to back its entry into the UK’s buy-to-let sector. The size of the facility was not disclosed but is understood to be more than £200 million. The long-term funding line allows LendInvest to provide specialist buy-to-let loans over the next two years, with the aim of securitising the debt in the residential mortgage-backed securities market.
In July 2017, the fintech firm raised £50 million through the issue of its first retail bond, in a bid to diversify its funding sources, which also include an online platform, a private funds business and bank credit lines.
The UK’s specialist real estate lending sector evolved during the last year, with several niche firms providing small-ticket financings via capital raised from a combination of retail and institutional sources.
Last September, one of LendInvest’s rivals in the specialist lending space, Octopus Property, held a £115 million first close on its Commercial Real Estate Debt Fund II, which will provide property loans with terms as short as three months in the UK real estate market. Octopus, formerly known as Dragonfly Property Finance, is aiming to raise £200 million, with a March 2018 final close expected.
Speaking about its 2017 performance, LendInvest CEO Christian Faes said: “Demand for high-quality lending products has not wavered. We expect to see this appetite increase again in 2018, as we further consolidate our dominant share of the short-term lending market and rapidly roll out our buy-to-let loan offering.”
The firm said its 2017 lending to property investors, developers and landlords financed the purchase, development or renovation of around 1,800 residential units in the UK. As well as buy-to-let lending, new additions to its lending products included refurbishment finance and pre-construction finance.
In total, LendInvest has provided more than £1.2 billion of property debt since it was launched in 2013. In 2017, its invested capital base more than doubled to £765 million.