In an earlier interview on the BBC, Communities Secretary Sajid Javid said taking advantage of record-low interest rates "can be the right thing if done sensibly".
The government should borrow money to fund the building of hundreds of thousands of new homes, a cabinet minister says.
Full article here.
In response to that, our CEO Michael Lynn has written to Sajid Javid MP, Secretary of State for Communities and Local Government about how peer-to-peer lending can help. In it he explains how utilising tax break products such as the Innovative Finance ISA (IFISA) and Self-Invested Personal Pension (SIPP) could aid in raising sufficient funding to meet the Govt target of building 300,000 homes per annum.
Full letter below
Dear Mr Javid,
I am the CEO of Relendex, an FCA regulated Peer to Peer lending platform for commercial real estate.
We lend to commercial developers and housebuilders throughout the UK.
I read with interest your comments this weekend about how to meet the Govt target of building 300,000 homes per annum to solve the housing crisis, by borrowing more to fund the expenditure.
This would not be necessary if the Govt endorsed secured lending through Peer to Peer platforms by endorsing the funding of housebuilding through ISAs and pensions.
There is at present a prohibition, for example, that prevents SIPPs lending on residential property assets. This was a safeguard imposed by HMRC that stopped pension beneficiaries using their pension to fund their own homes. It would be easy to clarify the legitimate use of pension money for the National Housebuilding Project. There are probably billions of pounds that could be released by this simple distinction alone.
The only way to get sufficient funding from the public, is by using these legitimate tax breaks effectively. Right now their effect is stifled by inappropriate rules, HMRC application of those broad rules and lack of clarity from the FCA on how IFAs can advise their clients on P2P secured lending.
It would be a relatively simple matter to draft a Statutory Instrument that cleared the path for massive amounts of funding and provide investors with a decent secure return.
I would be pleased to discuss these matters in person with you.
Kind regards Michael
