This comes after the peer-to-peer secured lending platform found that the number of new residential mortgages worth over £1m increased by 24% in the 12 months to 30th September 2016.

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Lendy discovered that the number of new £1m plus mortgages written by banks in 2015/16 increased to 4,844, up from 3,896 in 2014/15, while the total value of these mortgages grew by 18% from £7.59bn to £8.95bn in the same period.
 

The number of mortgages valued at over £1m went up 24% in 2015/16

The total value of all mortgages valued at over £1m increased 18% from 2014/15 to 2015/16. Source: BOE

Lendy felt these figures showed that banks were continuing to favour lending to owner-occupiers rather than property developers. 

This comes after it found that outstanding bank lending to developers fell 7% last year to £14.8bn compared with £16bn in 2015. 

“As more and more money goes to owner-occupiers, boots will struggle to get on the ground working to hit the government’s housing target,” said Liam Brooke, co-founder of Lendy.

“Housing targets will continue to be missed unless banks allocate more money to developers who build multiple homes at rapid rates.

“As the balance of lending shifts [in favour of owner-occupiers], it is smaller developers that are losing out.”

Lendy believes that too much funding to owner-occupiers leads to house price inflation, while increased funding to developers boosts the housing supply and moderates house price rises.

Liam feels that the lack of funding has caused developers to choose alternative forms of finance, such as peer-to-peer lending, to fund their projects.

As a result, Lendy has seen its loan book grow to £171m, compared with just £73m in December 2015.

“It is these small- and medium-sized developers especially that have found it hard to get funding from banks since the financial crisis,” said Liam.

“Peer-to-peer platforms such as ourselves are contributing more and more in getting new developments off the ground.”