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Lending Works’ investors show faith in P2P lending in wake of Brexit vote

Internal poll shows overwhelming majority set to maintain or increase P2P investments

• Rapidly growing peer-to-peer lending platform surveyed its 1,600 active lenders two weeks after EU referendum vote
• Poll shows 62 per cent plan to maintain current investment levels in P2P in the short-term, while one in five plan to increase them as a direct result of Brexit
• Just seven per cent plan to reduce their P2P investments, while 12 per cent are unsure
• Further customer feedback shows confidence in sector’s ability to deal with a downturn, and strong appetite for the Innovative Finance ISA

London, 18 July 2016 – Lending Works, the first peer-to-peer lender to have insurance against borrower default risks such as accident or loss of employment, today reveals the results of a poll of its investors’ attitudes towards peer-to-peer (P2P) lending following the surprising EU referendum vote on 23 June. The research shows strong support for P2P, with the majority of respondents set to maintain or increase their P2P investments.

Around 1,600 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 its ability to offer sanctuary and preferential rates to investors at a time of widespread economic uncertainty among many other asset classes.

Nick Harding, founding CEO of Lending Works, 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 at a time of great uncertainty, and it’s wonderful to see this viewpoint echoed in this response from our active customers.”

Focus on partnerships and growth

Lending Works also conducted more in-depth research with 30 of its 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 the company, 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 among participants 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.

Harding added:

“Our ongoing mission is to better understand the rationale behind the decisions our customers make. 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 immensely 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 our investors’ 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.”

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