Paul watson

'We are seeing much closer relationships between borrowers and lenders' as a result of Covid-19



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In an exclusive interview with B&C, Paul Watson, head of origination at Blend Network (pictured above), was optimistic with regard to the market’s ability to recover and expected the issue to be resolved in the second half of 2020.

“We don’t think there will be a wide-ranging, long-term effect — instead, we believe it will be a short, sharp correction, and very much contained.

“…We do expect that pricing will come off in the residential markets, but that will be a temporary adjustment before a speedy recovery in the second half of the year, given the underlying fundamentals in UK residential property,” he predicted.

Paul highlighted that more collaborative working methods and genuine care for others were silver linings to the pandemic.

“We are seeing much closer relationships between borrowers and lenders, which is only a good thing for business rapport and maximising enjoyment of work,” he said.

In addition, Paul claimed that P2P lenders that do not source their liquidity through the banking system were “in a better position” to absorb liquidity shocks.

“…P2P lenders, like ourselves, do not rely on overnight markets,” he explained.

“Instead, we rely on private liquidity at a time when — judging by our own anecdotal evidence from speaking to investors — many investors have been liquidating their equity positions and are looking for alternatives, with fixed-return lending to the right borrowers a favoured alternative.”

Despite the strong impact the coronavirus pandemic has had on the specialist finance industry, Blend Network continues to lend, albeit in a much more selective way, due to increased risk.

Blend’s lending criteria has shifted away from typical products, to case-by-case scenarios, with each deal being assessed on risk, and terms issued accordingly.

The lender is currently offering loans between £150,000 and £5m, with LTV up to 75%, term times between three and 24 months and rates from 0.7% per month.

“We are working very closely with borrowers to support them through the current situation and help them manage it as and when required — we are working with them as partners coming from the mindset that we are in this together.”

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