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Homeowners fear risky peer-to-peer lending

Adam Williams
Written By:
Adam Williams
Posted:
Updated:
15/04/2015

A large number of homeowners are shying away from peer-to-peer lending as they fear it is too risky.

A survey by lender Landbay found 42% of homeowners were afraid of the risk levels associated with lending of this kind.

Additionally 22% of respondents said they had never heard of peer-to-peer lending while 17% do not understand how it works.

The survey questioned over 2,000 homeowners and found younger generations were more open to the risks associated with peer-to-peer. Only 28% of those aged between 25 and 34 said this type of investment was too risky.

However, across all age groups, around 5% of homeowners surveyed had already invested in some peer-to-peer platform. Almost one-third (30%) of those homeowners had invested amounts of £1,000 or less.

Some 18% of respondents had invested more than £5,000 of their cash.

John Goodall, cofounder and CEO of Landbay, said peer-to-peer firms needed to be more vocal about the investment opportunities offered.

“These research findings highlight the need to debate the merits of risk more in financial planning. We need an open and proper discussion on whether more people should consider moving a small proportion of their savings into an investment,” he said.

“Of course risk is not for everyone, but it appears too many hoard large amounts of money in cash savings when it might be wise to consider putting a small amount of those savings at risk in exchange for better returns as part of a balanced approach.

“The question is whether too many people see it as a binary choice between keeping all their money safe in the bank or putting it all at risk. Instead it should be about finding the right balance to achieve what you want to with your hard earned cash.”


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