UK’s P2P Property Lending Delivers Returns from 2.25% to 12.7%
4thWay, an independent ratings agency, is out with a thought-provoking statement on the peer to peer lending for the property market in the United Kingdom. This sector of alternative finance has been very prevalent due to the asset category and the stable earnings. Despite the Brexit turmoil, peer-to-peer property lending continues to be a strong and a rising prospect for general investors.
The report says there are 12 peer-to-peer lenders that specialise in property. These platforms’ have lent a total of £1.6 billion since 2013. Revenues have ranged from 2.25% to 12.7% and 11 out of 12 platforms have zero lender loss. 4thWay says there have been instances of bad debt but investors have not lost their money chiefly because the investment is being secured by the property. Generally, lenders have lost just £15,000 out of £1.6 billion lent, which is 0.0009%. Funding Secure is the only platform which has experienced losses of 0.02% – spread over three years. 4thWay states this is effortlessly counterbalanced by interest of 12.7% per annum.
The report states that lending decisions are justified by underwriting processes with “sensible” highest loans-to-value of 70% to 80%. Average loans-to-value (LTV) are significantlylower. In some instances, lenders can specifically select loans with a maximum of 50% LTV. An illustration of this may be found through Proplend. Interest rates stay high as lenders are cautious, they require a premium.
While many investors demand lenders to commit at least £25,000, there are chances to lend from as little as £1 at two P2P lending platforms, and £500 or less at seven. This makes it easy for stockholders to diversify their money across variousproperties and lessen their risk.
Neil Faulkner, co-founder and MD of 4thWay, said: “There are a lot of P2P lending providers focused on secured property lending. Collectively, they give lenders near-instant diversification, high interest rates, and very attractive property security. It is an excellent time to be a lender and there areoptions for every budget.”
“Most of these P2P lending opportunities are run by people who have a lot of prior experience in assessing these kinds of loans. They are using traditional processes to assess borrowers combined with new technology to lower the costs of lending, and then passing the bulk of the rewards on to individual lenders.”
Take a look at our website where our main product is peer to peer lending with a secured ‘first-charge’ for loans being offered to property investors as an alternative way to raise funds. General investors are also offered the chance to get potentially better returns on the investment, participating from £1,000. Stratosphere are regulated by the FCA (Financial Conduct Authority).
