Reasons to Be Cheerful

In what we absolutely promise is our second and final analysis of this month's budget, and before we move on to a lighter and more joyous festive mood to close out our 2025 run of blogs, we wanted to revisit the outlook presented by the OBR and perhaps paint a complete picture of the economic landscape. The direction of government policy is becoming increasingly apparent, pointing to a very favourable environment for our asset class. For Invest & Fund, 2026 is primed to be a year of strong opportunity, growing demand, and continued confidence from our lender panel, the valued backbone of our business, and the clients whose investments we assist in.

The OBR Economic and Fiscal Outlook (November 2025) gives us more than sentiment; it provides data-backed reasons to be bullish. From forecasts of rising residential investment to steady house-price growth and improved liquidity in the property market, the OBR highlights several developments that underpin our view that 2026 is a pivotal year for P2P lending. The key point is that the main Monetary conditions are turning favourable for property finance, with the OBR forecasting that Bank Rate will fall from 4% to 3.6% by the end of 2026, before gradually rising again later in the decade. This easing of monetary conditions supports the entire P2P development ecosystem: the core of the asset class, as more sites become financially viable and feasible. We talked about feasibility in part one of this blog, and expansive monetary conditions expand development pipelines, essentially increasing the number of opportunities whilst also diversifying portfolios from an investment perspective.

The OBR projects that residential investment growth, just 1% in 2025, will expand significantly from 2026 onward, reaching 7% in 2027 and 2028 as planning reforms and lower interest rates feed through to the market. As developers ramp up activity when investment conditions improve, more projects come to the platform, and the demand for alternative finance naturally increases, as banks aren't adjusting their position based on this, their choices are commercial, and larger developers that fall outside of the remit of our sector will also expand their horizons and borrowing requirements that need servicing. Invest & Fund specialises precisely in this segment: supporting experienced, asset-backed SME housebuilders who will be among the first to accelerate output when conditions become more favourable.

The OBR notes a significant surge in net housing additions from 2027, rising from 215,000 in 2026-27 to 305,000 by 2029-30, with planning reform identified as the core driver. I know what you're thinking: given the trajectory we are on, it's hard to cast the predictive net that far ahead, but what we can focus on is that the groundwork for that growth begins earlier, likely in 2026, as developers secure permissions and site pipelines that will feed into the late-decade boom.

So, what does that mean for our investors?

Well, let's list them. More shovel-ready projects. More developers are seeking financing to prepare for supply expansion. Greater certainty that completed units will be absorbed by a structurally undersupplied market. When planning barriers fall, SME housebuilders, who make up the backbone of I&F’s borrower base, are the fastest to mobilise. The OBR forecasts consistent house-price growth at around 3% in 2025 and 2.5% annually from 2026 onwards, with average prices rising to £305,000 by 2030. This supports exit certainty for borrowers, it reduces the volatility that would otherwise threaten GDV assumptions, and, more importantly, helps maintain strong security values on loans. For I&F lenders, this means deals backed by robust, realistic market valuations rather than speculative pricing.

One of Invest & Fund’s great strengths going into 2026 is the depth, stability, and ongoing engagement of our lender community. We are proud to say our lender panel is highly engaged, with reinvestment levels consistently strong. Our lenders make our business possible, and we value their partnership immensely. Their appetite for well-structured, asset-backed lending gives our developers the confidence to build, and our platform the strength to grow. With the OBR projecting a rise in investment, improved liquidity, and sustained demand, 2026 sets the stage for more frequent loan opportunities, high-quality borrowers with strong track records, and increased competition among SME developers for fast, flexible funding.

So, what's our conclusion here?

The convergence of market conditions, lower rates, increased residential investment, higher labour incomes, rising transactions, and persistent supply shortages will make 2026 a truly compelling year for property-backed P2P investing. With our valued and active lender panel, a robust pipeline of quality developers, and the economic backdrop aligning with the strengths of the P2P model, Invest & Fund is exceptionally well-positioned for the year ahead.

If you’re considering joining or expanding your involvement in P2P lending, 2026 offers one of the strongest entry points in recent years.

Invest & Fund has returned over £330 million of capital and interest to lenders with zero losses, showing the rigour that governs our business.

To take maximum advantage of this robust and exciting asset class, please visit www.investandfund.com

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