Peer2Peer Finance News
The UK's first peer-to-peer finance magazine for investors and the industry
  • Home
  • News
    • Personal Finance News
    • Industry News
    • SME News
    • Global News
  • Property
  • IFISA
    • IFISA Guide
  • Video
  • Open Banking
  • Cryptocurrency
  • Features
    • Joint Ventures and Promoted Content
  • Comment & Analysis
  • What is P2P?
  • Partners
  • Events
    • Past Events
  • P2P Power 50
    • Power 50 2020
    • Power 50 2019
    • Power 50 2018
    • Power 50 2017
  • Sign up to our e-newsletters
  • Magazine
  • Directory
  • Jobs
  • My Account
    • Manage Account
    • Change Password
    • Log In
    • Log Out
money
November 19 2019

Value of new P2P lending hits record high but returns are falling

Marc Shoffman Industry News, News Landbay, LendInvest, Lendy, Link, Mark Davies, peer-to-peer lending

PEER-TO-PEER lending hit a record high of £3bn in the first half of the year but losses are also increasing, a report warns.

The latest Marketplace Lending Index from the Link Group, found that marketplace – or P2P – platforms are collectively lending £16m a day.

The index estimates that the value of lending could total £6.2bn for the entirety of 2019.

Property lenders, including Landbay and LendInvest, accounted for three-fifths of the additional lending in the first half of the year at £848m, up by 54.5 per cent compared with 2018.

Business lending totalled £1.1bn in the first six months of 2019, a rise of 14.5 per cent annually, while new consumer lending was up 9.4 per cent to £990m.

Despite an increase in lending, returns have fallen to the lowest on record, according to the research.

Investors are receiving 3.8 per cent on average, down from the peak of 6.3 per cent in 2016.

This was attributed to rising loss rates, which the report blamed on a move away from contingency funds.

Read more: Funding Circle loanbook hits £5bn as P2PFA reveals health of the sector

Read more: P2PFA looks to woo intermediaries

“P2P and marketplace lending has witnessed a tumultuous year so far. The sector has been beset by controversy, not least by Lendy’s fall into administration,” Mark Davies, managing director of Link Mortgages Services, said.

“Economic and political uncertainty has provided a more troubling backdrop for consumer and business lending too, and losses have risen. In spite of all this, marketplace lending continues to grow as platforms cover the funding gap left by traditional banks.

“More change is coming. Tighter regulation requires clearer disclosure on performance, more robust risk management, and restricts lending to retail investors. This will reassure the large-scale institutional investors that are vital to platforms building a more diverse funding base, and it should support long-term, sustainable growth.

“However, as losses rise, and the potential for an economic downturn looms on the horizon, it is clear that marketplace lenders are heading into new territory. Should we see the economy slow further, the risk management, loan-servicing and recovery practices they have in place are likely to face significant testing across the board for the first time.”

Read more: P2PFA members confirm plans for loanbook data

RateSetter cuts interest rates on two accounts SME finance aggregator BIZL hires Ravi Ambasana as head of product

Related Posts

David Bradley Ward Ablrate

Industry News, News, Top 3

ASMX has traded almost £6m in the past 90 days

concept of economic recovery after the fall due to the covid 19 coronavirus pandemic. Financial graph 2021. Stock market chart. Businessman pointing graph. Return of growth after a fall

Industry News, News, Top 3

UK fintech investment hits record £2.5bn in first quarter

Closeup image of a businesswoman stacking and putting coins in a glass jar

Global News, Industry News, News, Top 3

Neo Finance achieves record quarter for lending

Popular posts:

  • Metro Bank starts offering RateSetter loans in its branches
  • Business Loan Network appoints administrators
  • Assetz Capital launches new bridging product
  • Funding Circle chief turns down £190,000 pay rise
  • PwC brings fintechs together for collaboration
  • Assetz Capital overhauls access accounts to boost liquidity
Back To Top
  • Home
  • Contact
  • About
  • Team
  • Advertising
  • Subscribe
  • Privacy
  • T&Cs
  • Disclaimer

Follow Us on Social Media

© Peer2Peer Finance News 2020
• Additional design by