Assetz Capital said it has funded 60 per cent more loans over the last 12 months than the previous five years combined, bringing the total amount it has lent to British businesses to £820m since it was founded.
The Manchester-based fintech said it has lent £300m over the last year, the majority of which were development finance loans. It added it struck 147 of these deals valued at £170m over the last 12 months, leading to the construction of 1,706 homes. It claims this amounts one in 100 of all new UK homes built over this period.
The firm, which matches lenders with small business borrowers, said it also originated 124 commercial mortgages valued at £63m over the last year.
Assetz Capital, founded by chief executive Stuart Law (pictured), said it has provided the backing to build 4,000 homes since it launched in 2013. It has over 34,000 investors on its platform.
However, house price growth remains patchy across the country, as Brexit uncertainty constrains buyers.
Patchy house price growth
London house prices fell 4.4 per cent in May compared to a year ago, their fastest rate for almost a decade, according to data from the Office for National Statistics released last week.
It was the biggest fall since the 7 per cent tumble recorded in August 2009 as the effects of the financial crisis took hold on the housebuilding sector.
However, across the country, house prices lifted by 1.2 per cent in the year to May, although this is down from 1.5 per cent in April.
But in the North West house prices grew by 3.4 per cent in May compared to the month before, and rose by 2.8 per cent in Scotland over the same period.
Assetz Capital’s Law said: “In recent years, peer-to-peer loans have become more popular amongst the underserved small and medium business owners across the UK, acting as an increasingly sought-after alternative to bank loans. Banks have stepped back from this middle ground of £200k-£10m secured loans and in particular from SME housebuilders, where the cost of originating and servicing these loans, or the cost of capital has driven them from this large sector.”
Luxembourg fund
Assetz Capital also provides a range of alternative finance products to businesses and property developers in the UK, including bridging finance and residential refurbishment loans.
In May, the firm launched a Luxembourg-based private fund to boost lending opportunities. It said the fund will focus on short-term UK loans it originates to small businesses, adding that around 90 per cent of the firms the fund deals with will be based outside London.
The fintech said the fund will be open to institutions, family offices and “other well- informed investors”.
Luxembourg is the second largest fund investment market in the world after the US, holding €2.4trn under management, with investors taking advantage of the unified European single market, as well as the country’s flexible regulations and low taxes on funds.
Assetz Capital, like most peer-to-peer platforms, is racing to add customers and hand out loans to boost scale, which it later hopes to turn into profits. These fintech firms continue to attract billions from investors who believe this wave of companies can emulate Big Tech giants such as Facebook and Google.