The government’s planning permission changes have been welcomed by peer-to-peer lending platforms who focus on property development loans.
The permitted development changes from the government are expected to result in a rise of business from small and medium sized enterprise (SME) borrowers.
The new rules that came into play on 1st August allow two-story extensions to blocks of flats and from September legislation will remove the requirement of planning permission for demolishing unused commercial properties to build residential homes.
Development P2P lending platforms are now forecasting a rise in business thanks to the new legislation which will make it easier and more time & cost effective for borrowers to undertake projects.
Chief Executive of Blend Network, Yann Murciano, said the changes will make it easier for experienced small property developers to push through projects thanks to the cutting of red tape.
“We definitely expect more business from SMEs. We expect to see a lot more conversion of unused commercial into residential and for SMEs it’s really good.
“Commercial to residential conversions require more specialist lenders like platforms like us, that understand the area and the projects,” he said.
Mike Bristow, Chief Executive of Crowd Property, said that the survey they conducted to SME property developers found their third biggest barrier was the planning system.
“If you unlock the planning system and make it more straightforward and easier, with sensible constraints such as still protecting listed buildings and relax some of the bureaucracy and red tape, this country will build more homes as a result,” Bristow said.
“More homes will be built, and they will need to be funded so more business will come our way. The overall market will grow, and we’ll continue to grow our share of that market.”
Head of lender relationships at Invest & Fund, Graham Martin, said trying to organise planning takes time and money which favours the bigger house builders.
“If you can make that process a lot easier, there won’t be as many barriers for SMEs,” he said.
“That’s an opportunity and we expect to take market share from SMEs.”