Brexit effect on P2P lending

Let me know if you think I'm missing an option and I'll try to add it.

I wondered how long it would take before somebody did a poll on this. It's hard to say but personally I think in short term I don't think a lot will change in respect to Brexit. Maybe Euro P2P might have to make some changes but for UK based P2P my biggest worry right now is internal regulation which dose seem to coming down the line. 

The only Brexit/EU related effect I could envisage would be around confidence, depending on the outcome of 'the deal' banks might tighten up their lending criteria, which in turn could cause friction in the market especially around property and mortgages, which might apply a small downward pressure on house prices. However the alternative finance sector is now quite substantial and tightening around mortgage criteria could provide an opportunity to Alternative finance and P2P anyway. 

Plus I think hedging against low-confidence is wearing a bit thin now after two years there becomes a point where business need to stop holding their breath and get on with business regardless of conditions.

I guess the other aspect that might have an impact especially on the upper levels of the economy is currency. The Euro took a further pounding after the TM deal was roundly rejected but the £ is generally weak anyway (down about 12-15% to pre vote). The dollar has been high but is showing signs of weakening. It's possible all 3 currencies could correct and find an equilibrium that minimises negative impacts on all 3 economic areas. Currency is a dark art though and very hard to predict for the most part.

In short, strap yourself in for exiting ride.                          

And which European restrictions are these?

There may be more defaults in property loans in the south as foreign capital may be a bit harder to attract and project margins are squeezed with the slowdown in housing markets. 

I feel there here may be temporary hiccups in lots of areas that workarounds will eventually fix.

A far more detrimental picture would be seen were a Labour government get elected. The proposed increase in corporation tax would 
halt profit making in favour of reinvestment reducing the need for external P2P borrowing.

The opposite may However be beneficial where corporations avoid the higher taxes by offsetting it against loan interest and P2P borrowing would increase.

Not long to go and we will find out. 

What would be the effect of this lack of SM liquidity? The accounts with immediate access in "normal times" (like AC QAA, RS, LW etc) would be frozen. New money might dry up, and I suppose that could affect some platforms' viability.  But essentially one would have money tied up until term for the loans one was in - the lack of liquidity in P2P investment would be fully exposed.  Nevertheless, I would think defaults is the main issue (i.e. whether the well-meaning experts were right) rather than attempts to withdraw on SM. 

 

The exception at the moment is Welendus it has way more money to lend than borrowers so selling is no problem making it very liquid.

I commented due to today's Martin Lewis email which included:

Is peer-to-peer lending riskier with Brexit? It looks like savings but smells like investing. If you are considering putting money in, or have done, it's worth knowing the risks, especially with Brexit looming

My bet is that after Brexit the EU will use psychological rather than economic tactics against UK. E.g. target football transfers as this has big impact in minds of voters but low impact on EU economies.