The latest OFF3R Index data revealed that peer to peer lending levels continue to rise in the UK. The data shows over £1.8 billion was lent in the first half of 2017 by the nine platforms that make up the Index. This figure represents an increase of over £350 million from the previous half year period at the end of 2016 and an increase of over £600 million for the same period in 2016.
The half yearly figures were boosted significantly by the fact that over £330 million was lent by the platforms in June. This represents the highest amount lent on a month by month basis since the OFF3R Index started in 2016. The figures follow the announcement last month that the first half of 2017 was also a record breaking period for the equity crowdfunding sector.
These are very positive results for an industry that continues to benefit from the current low interest rate environment. Another milestone was also reached last month, when Ratesetter announced that they had lent over £2bn as a platform.
Assetz Capital helps to drive lending levels in the UK
The data also revealed that Assetz Capital had a record breaking month in June 2017. The total amount lent of over £30 million by the platform was higher than any previous period since the OFF3R Index began. This comes on the back of the news that Assetz Capital are looking to increase their nationwide broker network to help grow the business.
Assetz Capital CEO, Stuart Law, commented that “while some of our business has come directly from SME businesses, the significance of the broker market is not to be underestimated in their contribution to Assetz Capital’s continued growth and success. With rates on commercial mortgages starting from 6.9%, development finance from 7.9%, bridging from 0.65% pm and renewables from 8.9% we are seeing real traction on winning business. Indeed, in June for example we advanced a new record £31m facilities and also had a record quarter of £60m+ of facilities. In fact in June development lending alone was approximately 4% of the entire development funding provided by all UK banks (based on BBA data). It is great to be supporting UK SME’s and smaller house builders to such a level.”
Where next for peer to peer lending?
This positive data shows that P2P lending is a well established part of the financial landscape in the UK. However, some news released in July also highlighted some of the risks of P2P lending. Ratesetter told customers that they had intervened to take took over two businesses and take a minority stake in a third. According to The Guardian, this intervention was an attempt to protect investors from possible losses from £80 million of struggling loans.
The positive action taken by Ratesetter demonstrates their willingness to step in where investors may be at risk of losing money. Nonetheless, this news is a timely reminder for investors to be aware that P2P lending involves a level of risk.
Lily Bridgwood, OFF3R