P2P property lenders prepare for market correction

PEER-TO-PEER property lenders are planning to avoid London and boost their underwriting criteria as they prepare for economic uncertainty surrounding Brexit.

Blend Network has said it favours backing developments with an exit plan – which are no longer certain in the capital – while LandlordInvest said its underwriting criteria could get stricter if there was a market correction.

It comes after research by Savills found growth will be stagnant in prime markets over the next two years until Brexit negotiations are complete.

The estate agent predicted prime central London residential properties will grow in value by 12.4 per cent on a five-year view, while it sees values appreciating by 11.5 per cent in all prime regions.

There have also been warnings that a no-deal Brexit could result in house prices falling by up to 30 per cent.

Blend Network said it was avoiding the London market due to concerns around stamp duty and Brexit.

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“As banks are preparing for the worst-case scenario, bankers in London are starting to panic,” Roxana Mohammadian-Molina, chief strategy officer for Blend Network, said.

“As a result, we see the market remaining soft for the next five years.

“Therefore, in terms of lending in the London market, our worry is on the exit. As P2P lenders, we focus on the short term and having a solid exit plan. Exit plans are far from solid in London at the moment.”

Filip Karadaghi, managing director of LandlordInvest, added that the platform was considering ways to prepare for a  market correction, which could include stricter underwriting.

“We are quite concerned regarding the outlook for the next year, both for the general economy and the property markets, and are considering various ways to prepare for any correction,” he said.

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