Budget 21: Govt must bring alt lenders into the fold to solve housing supply crisis
Budget 21: Blend Network welcomed the various measures implemented in today’s Budget announcement aimed at stimulating the housing market, but has warned that without equal focus being placed on the supply side, this support can only go so far to solving the housing crisis.
Roxana Mohammadian-Molina (pictured), chief strategy officer at Blend Network, told Specialist Finance Introducer: “A lot of the focus seems to be on supporting demand for housing, which to be honest is almost a bubble. If you are just fuelling demand, it’s going to have an impact on price if you are not also tackling the supply side of the market.”
While the pressure and impact on public finances as a result of government support measures during the pandemic is undeniable, Mohammadian-Molina suggests that this is the time to turn to the resources at play in the private sector.
She said: “On the supply side, the main problem is the lack of funding.
“I understand that there’s a lot of pressure on government finances, so putting public finances into the property market is not an ideal notion, but in the private sector there’s a lot of funding that is looking for returns – investors are looking for returns.”
To ensure that this investment works best in stimulating the supply side of the housing market, Mohammadian-Molina has called for the government to pay more attention to the work being done by alternative and peer-to-peer lenders, such as Blend Network.
She said: “This is exactly what alternative lenders are doing, they are creating a bridge between the developers who need money and the investors who want to invest money.
“So, what we really wanted to see is more support or recognition for the alternative lending industry, to be included in the discussion around how we solve the housing crisis.
“The alternative lending industry has appeared over the past 10 years, and demonstrated that it can be and needs to be part of the solution. It’s really about recognition from the govt of the work that they are doing.”
Mohammadian-Molina outlined the work that Blend Network and other lending platforms have been doing with public institutions such as Homes England, namely discussing how private lending platforms can help public bodies release funds to developers in need of funding.
She said: “Homes England is trying to lend money to property developers, but the problem is they don’t have an origination arm, so the discussion that we have had is, why don’t they lend through our platforms?
“At the moment, when the UK needs so many houses, and COVID has had such a huge impact, and there’s not enough support for house builders, one concrete measure that we would love to see is for example to work closer with Homes England.
“That has really huge potential, because they have an allocated budget to lend and we – and other alternative lending platforms – could actually deploy that money for them because we have the origination arms.”