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West One: Peer-to-peer troubles have rippled through the sector

Bridging lender West One Loans said troubled peer-to-peer lenders have caused ripples throughout the specialist lending sector.

Lendy and FundingSecure are high-profile examples of lenders going into administration.

West One said they should act as a warning to specialist lenders who take too much risk when chasing market share.

Danny Waters, chief executive of Enra Group, parent of West One Loans, said: “Regarding the elephant in the room that is the P2P business model, I was interested to see the policy statement from the FCA in June that talked about introducing more explicit requirements around governance and controls, and also that an ‘appropriateness assessment’ to evaluate an investor’s knowledge and experience of P2P investments be undertaken.

“This is a step in the right direction and mirrors our model, albeit with elected professional investors.”

West One also published its ‘bridging index’ for the third quarter of 2019.

Annual bridging lending was steady at £5.6bn in the year to Q3.

Q3 lending was slightly down on Q2, though property transactions reached a high level in September, which West One suggested could mean a strong Q4.

Waters added: “The bridging sector continues to perform well, even with a drop in lending against the previous quarter due to the summer months.

“We’ve talked about it a lot in recent issues of the Index, but increasingly sophisticated borrowers turning to bridging finance remains a key feature of this year and is how it is performing so well despite the extended Brexit negotiations limiting the property market this year.”