85% of public unaware of P2P investment potential following ISA rule changes
The full extent of the investment opportunity open to members of the public through peer-to-peer lending is only just beginning to be appreciated. A survey taken at The Property Investor and Homebuyer Show held recently in London revealed that 96% of the individuals asked considered P2P to represent a good income opportunity.
When questioned further if they would invest in P2P through their personal ISA allowance, 85% said yes. Yet more than two-thirds of those same people were not aware that this option will soon become a reality when investment restrictions on ISAs are officially relaxed.
Not only will such investments have the potential to produce tax free returns of 5-10% per annum (subject, of course, to ISA limits and the absence of any bad debts) to interest-starved investors – benefits normally enjoyed only by powerful investment institutions – but could also release billions of pounds to SMEs in need of an alternative to the banks.
Commenting on the potential, Proplend’s founder and managing director Brian Bartaby said: “Just imagine, if 85% of the people who put £40bn into cash ISAs in 2012-13, switched to the P2P route it would generate £34bn of precious funding for business.
“This would be a wall of retail money that looks and acts like institutional money.
“Individuals in the current long term low interest rate situation can look to P2P lending as a means to generate much-needed income from cash reserves and balances. £1bn has already been lent via P2P platforms this year.”
Formed in 2013, Proplend is a P2P lending platform that concentrates purely on secured loans to owners of income generating commercial property in the UK. Private investors can lend to property owners in the knowledge that their repayments are covered by rental income, with the added reassurance of a first charge over the property in the event of default.
