What are the average peer to peer lending returns?

For most, investing disposable income is no longer an option – it’s a must. Relying on the state pension for income post-retirement isn’t viable – and people need to start planning their financial futures much earlier on in life than ever before. But it can be difficult to know where to start. Your choice of investment will be affected by how quickly you want to make money, your attitude to risk, and several other factors. Peer to peer lending has emerged in recent years as a popular high return investment option that provides different rates depending on what type of investment you choose.  The question most people ask is: when compared to general investing with the bank, what are the typical peer to peer lending returns one can expect? Generally speaking, peer to peer investments offer much higher returns than traditional saving accounts. Interest rates on these types of accounts have been pitiful for many years now, so it’s unsurprising that investors are increasingly looking towards alternative options. However, it must be stressed that with the chance of earning higher returns comes greater risk and that, unlike traditional savings accounts,  with peer to peer investments your capital is at risk and your money is not protected by the Financial Services Compensation Scheme (FSCS).

The average returns you, as an investor, can expect from peer to peer lending do vary depending on your choice of platform. Here’s a look at some of the peer to peer lending options available in the UK, with details on their interest rates and the level of security offered.

P2P Platform Funding Circle RateSetter Landbay The House Crowd
Background Peer-to-peer lending marketplace that allows investors to lend money directly to small and medium-sized businesses. Loans are diversified across hundreds of borrowers. Peer to Peer lending website allowing users to lend and borrow money directly with each other according to their own interest rates. Peer to peer lending platform for residential buy-to-let mortgages. The UK’s original property crowdfunding and FCA accredited peer to peer lending platform, helping you make secured property investments.
Security? Unsecured Unsecured Secured Secured
Interest rate From 5%  From 3.2% Up to 3.54%

Average of 9.2%

The House Crowd’s peer to peer lending returns

 At The House Crowd, we combine secured peer to peer lending with property development, offering investors a number of diverse ways to build an investment portfolio secured on UK property through our easy-to-use crowdfunding platform. Our average peer to peer lending return rate per annum is 9.2%*  (this was the average net return paid out to investors on peer to peer loans from 2015 to 2018). When it comes to our property development loans, the average current return rate is 10% per annum. Loans require a minimum investment of £1,000.

Our Innovative Finance ISA delivers a tax-free return of 7%** per annum with a minimum three-year commitment and £1,000 minimum investment. Our Auto-Invest product automatically diversifies your investment across multiple loans and delivers 7%** per annum over a minimum 12-month term at a fixed rate – however, you can choose to compound your interest. Do that for five years and it could equate to an average annualised return of 8.2%.

If you’d like to know more about our peer to peer lending returns, give us a shout.

*Average returns based on bridging loan portfolio 2016-2018 (Average returns by year: (2016 = 8.8% p.a., 2017 = 9.7% p.a., 2018 = 8.9% p.a.). Remember, past performance is not a reliable indicator of future performance.

**Your capital is at risk and rates are  not guaranteed. Please read our Important Information page and Risk Warning  page before you consider investing.