The decision means the end of another peer-to-peer lender in the property finance market that has been heavily contracted by regulation and high-profile failures.
A spokeswoman told Specialist Lending Solutions: “Shawbrook will not be using RateSetter’s peer-to-peer platform and instead Shawbrook will be funding all loans through its retail deposits.”
Shawbrook purchased RateSetter’s development finance business which brought with it the firm’s £167m loan book, its team and 100 active borrowers.
Announcing the deal, the bank said it increased the scale and capacity of its existing development finance business while emphasising its continued commitment to the market.
Terry Woodley, managing director of development finance at Shawbrook, said: “The RateSetter business has been built by serving the needs of property developers in a key part of the market that remains underserved by traditional lenders.
“Naturally, this expands the market opportunity for the bank, and we are thrilled to welcome the RateSetter development finance team and new customers to Shawbrook.”
Consumer finance continues
RateSetter was launched in 2010 and started property lending in 2013. It has delivered more than £500m of finance to developers for renovation and construction of 2,300 homes across the country.
Chief commercial officer Peter Behrens said: “This transaction demonstrates the enduring quality of RateSetter’s loan assets.
“I am pleased that our property finance team can go to a new home where they will complement the Shawbrook team and continue to grow the franchise they have built.”
The RateSetter operation will continue offering consumer finance options after its purchase by Metro Bank was completed in September.