New | Beijing seen as gaining ground in battle to curb illegal online lending to housing market

Beijing got off to a successful start in its efforts to stem illegal fund flows to the sizzling property market as 17 peer-to-peer (P2P) lending platforms suspended loans for down payments on property.

The suspensions come just two days after China’s central bank announced plans to crack down on illegal lending to homebuyers.

According to yingcanzixun.com, an online consultancy tracking operations of the mainland’s P2P companies, on Monday 17 companies halted lending to those who seek loans for down payments.

“A total 20 P2P players were offering loans for down payments,” an official with yingcanzixun.com said. “It was a huge withdrawal from the businesses.”

Zhou Xiaochuan, governor of the People’s Bank of China, told a press briefing on Saturday during the annual plenary session of the National People’s Congress that internet firms were barred from lending money to homebuyers for down payments.

The statement was viewed as a prelude to a nationwide inspection into some questionable P2P businesses as regulators blame some intermediary firms for lending practises that have inflated housing prices in top-tier cities.