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Investors are putting £9bn to work in P2P Lending across Europe, UK still dominating
In the third in our series of articles exploring the State of the P2P Lending Market, we focus on how the industry has scaled.
The peer-to-peer lending market is now funding more than £9bn of loans across Europe each year with two thirds (67 per cent) of this funding coming through UK platforms.
Rapid growth in the industry, however, is starting to shift its ability to sustain growth rates that have been huge when compared with the growth of other new asset classes.
These are some of the headline findings in AltFi’s Peer-to-Peer Lending State of the Market Report, which is published today.
Gross new lending topped £6bn in the UK for the first time in 2018, reaching £6.055bn according to figures from specialist data provider Brismo.
That represents a 20 per cent increase on the 2017 total of £5.034bn in Europe’s biggest online lending market – a punchy rate of growth by most standards, but after two years of 40 per cent year-on-year expansion in volumes, 20 per cent represents a sharp slowdown in growth.
Continental Europe’s peer-to-peer lending market grew aggressively at 90.2 per cent in 2018 to £2.97bn (€3.32bn)—but this is expected to fall to 47.49 per cent this year.
Brismo is forecasting another year of 20 per cent growth in UK originations for 2019, which would lift the annual new lending figure to £7.27bn.
But even in announcing this number in early February, it suggested 20 per cent might be a stretch: “Before considering any change to the macro picture, e.g. that thing that starts with a B and ends with an EXIT, there is already a warning sign that our extrapolations may prove optimistic. This is because Q4, which has historically been very strong, ended rather meekly in 2018. Our seasonal adjustment will capture that, but only with a diluted impact, as part of the average of a three-year look back.”