P2P Money Blog

Here at P2P money we love statistics. RateSetter has produced some interesting facts and figures.  While it was fairly obvious that the city of London would have lent the most money, there are some much smaller places within the top 10 such as Royston in North Hertfordshire.  The village of Bruton in Somerset has the highest average first deposit in the UK at over £185,000 and another West Country town of Brixham has the 3rd highest average first deposit at over £83,000.

RateSetter is currently arranging £700,000 in loans on average every day and is one of the big three peer-to-peer companies within the UK.

Here is the full press release from RateSetter:

Some of the UK’s largest cities may be thriving centres of peer-to-peer lending, but small town Britain is the real pioneer of the lending phenomenon that is set to rival high street banking over the next few years.

A study of customers on the fastest growing major P2P platform, RateSetter, shows the town of Royston in North Hertfordshire has lent the most money per capita in the UK¹. Its population of around 16,000 has lent approximately £1.6m via RateSetter since October 2010, or £100 each.

London and Bristol may top the table for the total amount of money lent by people through the platform, but the towns of Braintree and Brentwood in Essex give them a run for their money relative to their size. The cities of Preston in Lancashire and Norwich in Norfolk also feature within the Top 10.

However, the village of Bruton in Somerset, with a population of just over 3,000, has the highest average first deposit in the UK at over £185,000, with smart savers putting between £1,000 and £370,000 on the platform.

RateSetter, which has to date matched over £240m in peer to peer loans, conducted the study of its customer base at the end of Q1 2014, prior to FCA regulation on 1 April 2014.

Loan uses: hearing aids to weddings

The highest single rationale for taking out a P2P loan is car loans (20%), followed by home improvement at 17%, debt consolidation also at 17%, holidays (4%), weddings (3%) and business loans (2%).

However, the greatest proportion of loans at 37% are taken out for an incredibly diverse range of uses - from bassoons to hand gliders - that can only be grouped under an ‘other’ category. This covers medical spending (hearing aids), education (PhDs and MBAs) and entertainment (home cinema systems) among others.

On car loans, Manchester is the highest centre after London. In terms of home improvement P2P loans, London again leads the way, followed by Glasgow, Manchester and Birmingham.

Rhydian Lewis, founder and CEO of RateSetter, said: “Our study shows that the UK is fast becoming a nation of people lending to and borrowing from each other without the banks taking a cut. It is great to see the phenomenon that will fundamentally change the way we save and borrow is being driven by savvy savers in large cities, who know the best way to earn a higher income from their savings.”

“And it is also edifying to see the peer-to-peer revolution has won the heart of small town Britain, where a decent return on savings was never needed more. This is a sign of how far lending and borrowing in the UK has changed - and will continue to in future.”

“We look forward to repeating this study later in the year to see how these patterns continue to evolve, and the impact of FCA regulation.”

Future growth

RateSetter found recently that nearly a third of people (31%) nationwide would be more likely to put their savings into a P2P account if they could do so through a NISA², which they will soon be able to do.

It is believed including P2P lending in NISAs, which the Government announced in its recent Budget, will lead to massive growth in the P2P market in the UK over the next five to 10 years, increasing it from around £1bn to £45bn³.

RateSetter’s Provision Fund - the largest in the sector at £5m and the first to be launched - has ensured that no saver has ever lost money since the company’s launch in 2010.

¹ Study of RateSetter’s nationwide customer base, October 2010-March 2014.

² Peer-to-Peer Isa Survey, Populus, compiled January 2014.

³ P2P Lending: Opportunity and How to Invest, Liberum, March 2014