LendInvest: Property fintech brings Lloyds funding deal to £300m for mortgage market push
LendInvest has secured a new £120m funding boost from Lloyds Bank today as it prepares a push into the UK’s £1.2tn homeowner mortgage market for the first time.
The London-listed property fintech firm said Lloyds had now offered up a credit facility worth £300m after striking a deal for an initial £180m in October to fund its buy-to-let offer. LendInvest said the deal would now boost its funds under management to more than £3.6bn.
The funding boost comes as bosses prepare to roll out its homeowner mortgage product to the market after a period of initial testing in December.
Rod Lockhart, chief of LendInvest said the “complexity” of the UK mortgage market made it “ripe for disruption” for digital lenders.
“There’s a huge number of manual processes, even for the most simple and straightforward, mainstream mortgages,” Lockhart told City A.M. in an interview. “The fact that, in this day and age, those processes still exist […] there’s an opportunity for people to come into the space and to reduce the friction. That’s the immediate challenge and that’s our opportunity.”
Lockhart said the firm was initially looking to scoop up customers with incomes from multiple sources before rolling out products to the broader market. Shares in LendInvest are trading up over five per cent on news of the move.
Big fintech firms have been increasingly edging into the mortgage market, with Starling Bank snapping up buy-to-let lender Fleet Mortgages and Revolut reportedly set to roll out its own homeowner mortgage product. Lockhart said the competition was more the merrier for consumers, however.
“It’s an opportunity for others looking at the space too, so I don’t think there’s an issue with ‘crowding out. The issue is actually making the process better for for customers to be honest,” he told City A.M.
LendInvest’s new push comes after a period of turmoil in the UK’s mortgage market after Liz Truss’s disastrous mini-budget sent rates rocketing in October. Hundreds of products were pulled from the market as lenders struggled to accurately price.
Bank of England governor Andrew Bailey said yesterday that the market had settled and the “risk premium” in the UK interest rate environment had now gone.
Data from moneyfact.co.uk showed that mortgage deals were now consistent with the beginning of September, prior to Truss’ budget, at 3,800, Sky News reported yesterday.