As a platform, we take great pride in all that we've achieved since opening our doors for business nearly six years ago. We’ve
Our lenders show faith in P2P lending after Brexit vote
Today we reveal the results of a poll we conducted to survey our lenders' attitudes towards peer-to-peer (P2P) lending following the surprising result of the EU referendum vote on 23 June. And we're pleased to say the research shows strong support for P2P, with the majority indicating that they will at least maintain, if not increase their P2P investments.
Just under 1,600 of our active lenders were asked how the Brexit vote and subsequent economic volatility would affect their levels of investment in P2P lending as a relative share of their investment portfolios. Just over 62 per cent confirmed that they would be leaving it unchanged in the short-term, while 19 per cent said they would be looking to increase their portfolio allocation to P2P.
Only seven per cent said it was likely that their P2P investments would decrease, while the remaining 12 per cent said they were undecided.
The results represent a firm vote of confidence in the sector as a whole, and the ability of platforms like ours to offer sanctuary and preferential rates to investors at a time of widespread economic uncertainty among many other asset classes.
Our founding CEO, Nick Harding, commented:
“We’re delighted to see such a significant and overwhelmingly positive response to our poll, which is indicative of the confidence our customers have in peer-to-peer lending, despite the volatility in the various investment markets at present.
“It was always our position that we were in favour of Britain remaining in the European Union. But, as a company, and indeed as part of the wider P2P industry, we’ve also firmly held the belief that our immediate exposure to the ramifications of Brexit would be minimal and indirect. As a result, we’re confident that we’re well placed to offer stability to investors, and it’s great to see this viewpoint echoed in this response from our lenders.”
Further research yields similar levels of optimism
Subsequent to the poll, we also conducted more in-depth research with 30 of our most engaged lenders to further understand the thought processes of a typical P2P investor following the UK’s vote to leave the EU. The group was asked four qualitative-style questions, which looked at attitudes towards our platform, P2P lending in general, and other asset classes in the context of Brexit.
Responses regarding fears in terms of other investments were mixed, but overall the group held a comfortable and optimistic outlook on the merits of P2P lending. While the risk of increased defaults in the event of a downturn was acknowledged, most participants were at ease with the levels of protection in place to deal with such a threat. A greater concern was the potential impact on interest rates within the sector, while many also conveyed that the arrival of the Innovative Finance ISA (IFISA) was the issue most prominent in their minds.
“Our ongoing mission is to better understand the rationale behind the decisions our customers make," Nick noted. "After all, our lender base is made up of many successful investors with plenty of expertise to offer. We were once again struck by the optimistic attitude of our lenders, with regard to both the short and long-term prospects of P2P lending.
“Their concerns about rates offered through a platform such as ours being suppressed by external forces are duly noted. Yet while there can be no guarantees, we are confident that returns will remain equally, if not more, competitive in relation to other asset classes in terms of risk and reward for the foreseeable future – regardless of what happens to rates in the wider economy.
“We also share their sense of anticipation regarding the launch of the new IFISA – something we’re expecting to happen very soon, and which will bring great benefits for many years to come.”
Main image 'Sun Rays' by Lenny K Photography. Image subject to copyright. A link to the image and appropriate licence can be found here. You must not use or reproduce this image other than in accordance with the licence.
- Looking after your pension pot post-Brexit
- Brexit and Lending Works
- Are we really on the brink of a house price crash?
Get email updates for future blogs:
Our website offers information about saving, investing, tax and other financial matters, but not personal advice. If you're not sure whether peer-to-peer lending is right for you, please seek independent financial advice, and if you decide to invest with Lending Works, please read our Key Lender Information PDF first.
Since opening our doors back in 2014, we’ve always prided ourselves on living and breathing two key principles at Lending Works: innovation, and putting the customer first in everything we do.
With the retail sector enduring its fair share of challenges, companies are looking at new ways to attract customers, and drive conversion. In an overcrowded, dog-eat-dog marketplace, with behemoths such as Amazon flexing their muscle, it’s easier said than done.
On 4 June 2019, the Financial Conduct Authority (FCA) released its new regulatory framework for peer-to-peer lending (P2P); a Policy Statement known as PS19/14. As you might imagine, it's a document which, following a three-month consultation, is a hefty read of no fewer than 102 pages.
In a difficult climate, customer acquisition and lead generation present stern challenges for UK retailers, and a great deal of marketing spend invariably gets directed towards getting feet through the door.
Over the last decade, there can be little dispute that the reputation of mainstream banks – and particularly the so-called ‘Big Four’ (HSBC, Barclays, Lloyds and RBS) – is at its lowest ebb.
The peer-to-peer (P2P) lending industry is now regulated by the Financial Conduct Authority (FCA). The regulatory framework has been designed to protect customers and promote effective competition.
In the 1970s, it was standard fare for governments to manipulate interest rates, particularly in the run-up to a general election. Lower borrowing costs keep a lid on unemployment, and stimulate economic growth.
For close followers of financial forums, one oft-trotted line among brokers is that fixing one's mortgage has seldom been to the retrospective benefit of the homeowner in the past 25 years.
One of the hallmarks of the cash ISA's success following its launch two decades ago was its simplicity, and it has undoubtedly proved a popular choice among UK savers.