P2P platforms provide support as share of new SME builds declines

Peer-to-peer property lending platforms have stressed they are well placed to support small and medium-sized enterprise (SME) builders after it emerged that the share of homes built by SMEs across England continued to decline.

Sirius Property Finance found that the estimated share of houses built by SMEs across England fell from 193,810 in 1988, or 40% of all houses built, to 162,470 in 2017, or 12% of all houses built.

It then fell back to 147,890 new homes per year, or just 10% of the total market share, in 2020.

Nicholas Christofi, managing director of Sirius Property Finance, said many SME builders simply haven’t been able to weather the challenges posed by Covid in the same way as their larger counterparts because many wouldn’t have the same cash reserves.

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Filip Karadaghi, co-founder and managing director of LandlordInvest, said that the exact reasons for the decline in the share of new housing built by SMEs are unknown because there are many possible factors such as inflation or difficulty in obtaining a funding.

He said that P2P platforms can help by providing finance to SMEs, but they still represent only a small part of the market.

“P2P platforms can provide financing to many of these SME homebuilders with competitive rates and good underwriting standards,” Karadaghi said.

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Stuart Law, managing director of Assetz Capital, said SMEs have a vital role to play in improving domestic construction output and that this year they will need specialist financing as banks withdraw their loans.

“Specialized finance will be crucial in 2022 as major banks continue to show a relative lack of interest in supporting SME builder housing construction,” he said.

“We also need to invest heavily in the sector in modern construction methods such as modular housing, as this allows for faster, cheaper and more environmentally friendly constructions, which require less highly skilled labor. than traditional construction methods.”

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