We’re out. Last Thursday the UK voted to leave the EU, and now we have an impending Brexit on our hands. But, following a referendum result that has caused commenters, experts and politicians alike to forecast nothing but doom (especially in the short term) for the UK economy, the P2P finance sector, according to some, will remain in a strong position to venture forth in prosperity.
Following the Brexit announcement on Friday, John Goodall, CEO and founder of P2P Property Lending Platform Landbay, said that the P2P industry’s lending model is “very well placed for being part of an independent Britain.”
Believing that the peer-to-peer sector’s funding bases will enable it to absorb any initial shocks that the referendum result has set off, the outcome, Goodall believes, will do little to disrupt the resilience of the UK’s already established industry, especially in the buy-to-let segment in which Landbay specialises.
“The private rental sector is built on strong foundations,” says Goodall. “Buy-to-let mortgages were one of the best performing types of loans throughout the credit crisis, and we believe demand for rental property will continue to outstrip supply, while average rents will continue to increase above the rate of inflation.
“We will no doubt see significant change over the coming months, but agile peer-to-peer platforms are in prime position to capitalise on this opportunity. At a time when investors are tripping over themselves to find an alternative to the equity markets, the strength of the rental sector makes buy-to-let backed peer-to-peer mortgages a sound and predicable investment proposition.”
Co-founder and CEO of LendInvest Chirstian Faes agrees, stating that his firm, at least, doesn’t anticipate a “wide-scale crisis of 2008 proportions”.
With concerns to the property market, Faes said, “The fundamentals of the property market have not simply u-turned overnight. The country remains in the grip of a huge housing deficit providing the foundation for the market, and property will always be an attractive asset class.
“Where there are shocks, there are opportunities too. Brexit may provide an opening for the UK housing market to cool and reset in areas where rising houses prices are stifling buying power. However, we are firmly of the view that downward momentum will be offset by a much weaker pound, prompting overseas interest in property again.”