The LLP is a forward-looking property market index which tracks five of the property market’s key drivers, which are:

• average weekly earnings
• the number of individuals in employment
• the gap between the government’s 2020 housing targets and the number of houses that have been built
• net mortgage lending for residential properties
• the average interest rate on a variable rate mortgage.

Lendy found that residential property prices in some areas had outpaced the fundamental drivers of house prices, with the East of England recording an average rise of 7.5% annually.

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The gap between UK residential property prices and its key drivers

Source: The Land Registry

The peer-to-peer platform revealed that the LLP downturn had been driven by a rise in new homes being built, but despite the fall, property remained a solid investment.

“The widening gap between house prices and the forward-looking LPP is a reminder that potential investors must diversify their investments as effectively as possible,” said Liam Brooke, co-founder of Lendy.

“Investing via a peer-to-peer property platform is an easy way to diversify your investments.”

The continued growth of property prices compared to their key drivers meant that those looking to lend against property could benefit from choosing properties with lower LTVs.

“Lending against property without taking on the equity risk of buying can be a better option for investors, providing diversified security rather than a large direct investment,” added Liam.