Property funding platform Lendy has gained authorisation from the Financial Conduct Authority, in a move which will pave the way for regulated products.
The authorisation could open the way for products such as an innovative finance individual savings account (Isa), which allows savers Britons to earn tax-free income from peer-to-peer lending.
Lendy, which launched in 2012, provides bridging and development finance to property firms, with loans sourced from a peer-to-peer platform.
The firm says is has so far facilitated more than £400m in lending, with 21,500 registered investors. The firm will continue its new investments alongside new investment products, its said.
Liam Brooke, Lendy chief executive, said the “long and sometimes challenging journey” to authorisation has “helped us mature into a stronger and more robust business”.
“This is a validation of our efforts to move from a young start-up to an established mainstream lender, with the ability to disrupt the banking model for the benefit of clients, and design new investment products and services.”
Peer-to-peer lending has boomed in recent years as online platforms have reduced the cost of accessing finance from multiple retail investors, while investors have also been attracted by the relatively high yields on offer particularly in the property space.
Brooke added that he believes Lendy has helped fund property developments which “wouldn’t have been delivered otherwise”.
He said: “This kind of finance is critical to tackling the UK’s housing shortfall, with house building now at its lowest rate since the second world war.”
Source: City A.M.