Research by peer-to-peer real estate investment platform, easyMoney, has shown that despite concerns that sector growth could dent investor returns, P2P lending return rates have largely climbed over the last 10 months as the UK sector is set to hit £376.6m in market size by the end of this year.
The global P2P market is currently worth an estimated $133.47bn, having increased in size by 26.3% in the last year alone and by 59.3% since 2021.
This growth is expected to continue, with the global market forecast to increase by a further 26.4% in 2024 and 26.6% in 2025, bringing total market size to $213.58bn.
The sector has also enjoyed strong growth within the UK. Figures show that in 2013, the peer-to-peer lending platform sector sat at an estimated market size of £21.8m. This has grown considerably each and every year since, totalling a huge £370.7m in 2022 – an astonishing increase of 1,600%.
What’s more, the market size of the UK sector is forecast to increase by another 1.6% in 2023, pushing total market size to a value of £376.6m.
This extreme rate of market growth has led some to claim that the returns on offer to P2P investors could be set to suffer.
However, further analysis by easyMoney suggests this is a trend that is yet to materialise. easyMoney analysed the returns currently offered by 18 major P2P lending platforms and found that, over the last 10 months, the average return has increased by 0.27%.
In fact, just six platforms have seen the average return offered fall during this time, with four remaining static and eight providing investors with an increase.
Jason Ferrando, CEO of easyMoney said, “Much has been made about the peer-to-peer sector’s meteoric rate of growth and what this means for investors when it comes to the return on their investment, with some forecasting a reduction in returns as a result of wider sector expansion.
However, we’re yet to see this materialise and easyMoney, like many other platforms, has actually increased our returns for investors. We aren’t reliant on bank loans or client profit margins, we are profitable, having doubled EBITDA for the last three years.
We don’t anticipate that the continued prosperity of the sector will change this fact over the foreseeable future and we look forward to rewarding our investors further, as we benefit from the growing popularity of the peer-to-peer sector and demand for peer-to-peer platforms.”
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