UK P2P Lending Industry Grows 37% in Q1 2015

The Peer-to-Peer Finance Association (P2PFA) has released data for the UK’s P2P lending market for Q1 2015. According to the report, P2P lenders lent more than £459 million in the first quarter of 2015, a 32.7% increase from Q4 2014’s £255 million in reported loans. Lending in the UK sector was led by RateSetter with £120.9 million in new loans, followed by Funding Circle and Zopa with £109.8 and £84.8 respectively.

During the quarter, lending figures were boosted by 13.8% growth in the amount of borrowers, which rose to 159,083, with cumulative outstanding loans of £2.64B. Lending was provided by 111,255 investors. The figures calculate to the average borrower holding £16,620 in loans, and investors averaging £23,764 in funds lent.

The data is collected from nine leading P2P lenders that report figures to the P2PFA, a UK trade body that provides rules and operating principles that are followed by its members. Christine Farnish, Chair of the P2PFA commented about the quarterly figures that “These numbers are excellent and reflect the strong industry growth into 2015. We are continuing to see strong appetite in the consumer market and a significant increase in lending flow to businesses too.”

Farnish added that looking ahead, growth in the UK market will be affected by how P2P investments are categorized within ISA rules as she stated “The future decision around how peer-to-peer lending will work within the ISA wrapper remains crucial for the industry this year. It is important to ensure a separate ‘Lending ISA’ is created, a decision that will not only create greater consumer choice, but will avoid any confusion of placing peer-to-peer loans with stocks and shares, a completely different and riskier asset class.”