Property fintech brings Lloyds funding deal to £300m for pressure on mortgage market

LendInvest has secured a further £120m funding boost from Lloyds Bank today as it prepares a push into the UK’s £1.2bn mortgage market for the first time.

The London-listed property fintech firm said Lloyds had now offered a credit facility worth £300m after striking a £180m deal in October to fund the buy-to-let offer. LendInvest said the deal will now increase funds under management to more than £3.6bn.

The funding boost comes as bosses prepare to launch their mortgage product to the market after a period of initial testing in December.

Rod Lockhart, chief executive of LendInvest said the “complexity” of the UK mortgage market made it “ripe for disruption” for digital lenders.

“There are a lot of manual processes, even for the most simple and straightforward, conventional mortgages,” Lockhart said By AM in an interview. “The fact that these processes still exist in this day and age […] it’s an opportunity for people to come into the room and reduce friction. That is the immediate challenge, and that is our opportunity.”

Lockhart said the firm was initially looking to acquire customers with multiple sources of revenue before launching products into the wider market. The shares in LendInvest traded up over five percent on the news of the move.

Major fintech firms have increasingly entered the mortgage market, with Starling Bank acquiring buy-to-let lender Fleet Mortgages and Revolut reportedly set to launch its own mortgage product. However, Lockhart said the more competition was the better for consumers.

“It’s an opportunity for others to look at the space as well, so I don’t think there’s a problem with ‘pushing out’. The problem is actually making the process better for customers to be honest,” he said By AM

LendInvest’s new push comes after a period of turmoil in the UK mortgage market after Liz Truss’ disastrous mini-budget sent interest rates soaring in October. Hundreds of products were pulled from the market as lenders struggled to price accurately.

Bank of England Governor Andrew Bailey said yesterday that the market had settled and that the “risk premium” in the UK interest rate environment was now gone.

Data from moneyfact.co.uk showed mortgage deals were now in line with early September, ahead of Truss’s budget, at 3,800, Sky News reported yesterday.