Record Decline in Housing Supply Opens The Door To UK Peer-to-Peer Lenders
After seemingly an eternity of inactivity, the housing market has dusted its shoulders, blown away the cobwebs and edged its way back into action.
Construction sites and housebuilders are slowly reopening. The government has permitted weekend and late working hours for workers. And now with the approval of house viewings and moves, the UK property market is making its first tentative steps to getting back on track.
But there’s much work to be done if we are to even get close to catching up with the huge backlog of building work and deliver the targets set out by Boris Johnson’s government.
According to research carried out by Knight Frank there will be a 35% drop in homes built this year because of delays caused by Coronavirus. This alarming figure represents the intense need now for homes to be built. The demand for affordable housing is now greater than ever.
UK Housing Secretary, Robert Jenrick announced on the 12th May that viewings and house moves can now continue, allowing buyers and renters to resume their search and house moves to progress.
Since easing these restrictions, we are now beginning to see the release of the demand that has been held back since the start of this hideous pandemic. On the day that Robert Jenrick announced that the government would lift restrictions, Rightmove saw a 45% increase in website visitors compared to the day before, while enquiries grew by a staggering 70%.
But as the government continues its efforts to uphold the economy through extraordinary levels of spending, there are question marks surrounding how we are actually going to reach the government’s housing targets. And there is even more uncertainty given Boris Johnson’s reliance on traditional funding methods up until now to boost this sector.
So as we enter a monumental backlog and historic decline in housebuilding while government funds diminish, there are opportunities opening out for the peer-to-peer and the alternative finance sector to bolster the national housebuilding effort.
The rapid degradation of public finances is likely to put pressure on Boris Johnson to consider all available avenues and turn his attention to alternative forms of funding such as UK Peer-to-peer lending.
In 2017 the alternative finance sector grew by an astonishing 35% to a total value of £6.2 billion, and we could now see a continuation of this growth if the government recognises this sector as a significant arm in its housebuilding arsenal.
The House Crowd’s peer-to-peer lending UK platform has raised over £122 million to date and has played an integral part within the North West UK’s housebuilding effort since the P2P platform was founded in 2012.
As further restrictions are eased and inevitably lifted, The House Crowd’s support and funding for housebuilders within the North West of England will continue, but the government is urged to step forward at a time when public spending is diminishing, and provide the mechanisms for the alternative finance sector and peer-to-peer lenders to fill the void.