Peer-to-peer lender LendInvest has reported closing 14 real estate development finance deals ranging in size from £400,000 to £10 million during the first four months of its development lending strategy.
The firm did not disclose the total volume of its development lending, although it is understood to have provided approaching £40 million of finance so far.
LendInvest launched its development finance team in December 2015, with the hiring of Steve Larkin from Royal Bank of Scotland (RBS) to head up the division. Larkin had been with RBS since 2000 and had most recently been a senior lender in its real estate asset management division. Prior to that, he was head of residential and development at the bank’s global restructuring group.
LendInvest’s development finance team is targeting small-scale UK developers which are unable to source loans from traditional banks. During March, the firm provided a £5.85 million loan to back the conversion of a commercial unit in North London. The loan will finance the planning process over the next three to six months.
Loans are typically provided for up to two years, backed by residential or semi-commercial schemes. Developers can apply for up to 65 percent of the scheme’s gross development value, up to 100 percent of the development cost and potentially 90 percent of total project costs.
The development finance team is aiming to double the volume and value of its portfolio in the next two months.
“The small scale development finance market is ripe for some innovation. Our transparent pricing, with no early repayment charges or non-utilisation fees, and our ability to turn around a credit-approved offer in one day means that we can help borrowers to act quickly,” said Larkin.
“All of our development deals are entirely pre-funded; we aren’t reliant on investors filling loans before the borrowers get their money. Speed is incredibly important in today’s fast-paced property market for the smaller developer who is competing with large housebuilders and equity buyers,” he added.