Online platform InvestSure has been launched, pledging to address “the chronic lack of available finance in the UK property market”.
It is aiming to allow property developers to access a diverse range of funding for their projects, where traditional banks have been unwilling or unable to provide it. Specifically it is targeting small and medium-sized developers which have struggled to acquire funding on favourable terms due to tight banking restrictions.
InvestSure CEO Janine Lewis – a management consultant who has advised CEOs and private equity investors – said: “The UK property market has been seriously dysfunctional for some time. Since 2007, bank lending has been limited to 65 percent loan-to-cost at best, leaving developers to bridge the gap.
“This prevents them from moving quickly and as a result activity has been opportunistic and sporadic. It has also placed an inordinate amount of power in the hands of investors, diminishing profits.”
InvestSure will open up developers’ projects, once they have been vetted, to those investors which come onto the platform and compete to fund the projects. It is believed that this will drive competition and allow an efficient process in which the cost of funding is forced down.
The platform describes itself as ‘pro-to-pro’ as it is open only to professional investors. This aims to differentiate itself from existing ‘peer-to-peer’ platforms.
InvestSure covers a range of property investments including development projects, assets, land and bonds in all asset classes. It will make its money from splitting fees with brokers and intermediaries who use the site. Until the end of this year, it is free to investors and property developers.