Risk v's Reward on P2P Property Loans ??

IMO the only solution to your problem, which we all share, is loan diversification. Expect some losses but the extra interest may cover those and still leave you ahead of safer investments. Unfortunately losses when they do occur are unlikely to be evenly spread. there may be few or none at all for a while and then a flurry in the next downturn. IMO this may turn out to be a good time to get started on this class of investment with the opportunity to build up a reserve before the next crash.

I mostly agree, but that doesn't mean that you have to invest in everything, good or bad. EDIT: I don't want to imply webwiz thinks we should invest in everything, just that it is worthwhile considering the Risk v Reward of each platform.
I don't think you can do this, and I will give two reason. The first is that on SS, for example, every current loan is a loan to the platform. Multiple loans to SS are not obviously increasing diversification. That is soon to change with their new P2P structure. But I am not sure about some of the others you name. My second reason for not ignoring platform risk is because the reason I am happy to lend on FC (at rates of about 8% after fee - won't lend on the lowest ones) is because I judge the platform risk to be lower than the other three you name. (I might be wrong.)
I am not an expert. I haven't had any professional dealing in this area. I have dabbled long enough to have had a few P2P default and that might be useful to you.

Borrower risk: I don't know which is riskier. I like developers with a track record and I like a first charge. In one loan the developer and family moved in to the development which made enforcing the security harder. I must look into the exact legal structure of that borrower.
Property risk: Yes, a built project is much less risky. These projects frequently overrun, by many months, with lots of 18%ish interest rolling up. Things do go wrong and need to be fixed before the building can be sold. Planning permission can sometimes be a problem, because of a failure to follow exact plans. If the project is more remote extensions to roads or utilities might be more expensive than forecast or slower to introduce. And the developer who bought the site is often the one with one of the highest forecast valuation for the completed project. The valuation is likely to be more accurate on a property that the valuer can actually see.
Property Valuation: The better P2P companies normally include the valuation report, and it usually has not only a valuation based on a normal sale, but also one based on a quick sale. A normal residential place will usually sell quicker than something unusual or more expensive than the local area. I would imagine that in a shallow recession London might do better than Hull, but that is mostly guess work. London prices have moved up a lot more than most others, elect Prime Minister Corbyn and I would imagine London would fall more than Hull. For some commercial properties the fire sale price can be half the normal sale price.
Safety nets: In any deep recession, I would imagine that a 2% provision fund would be useless. I would expect many loans to be failing and losses to be significant. There wasn't any property P2P in 2008, so it is hard to know exactly what might happen.

I agree, but I think there is a second question: when it comes are our losses closer to 10%, or 30%, or something else?

Me neither

Wikipedia on Irish property bubble:

"House prices in Dublin were at one point down 56% from peak and apartment prices down over 62%"

We aren't in Ireland, may as well publish Iceland property price data.

I just can't see that sort of fals in the UK. In 2008 we saw around a 25% fall, which if repeated could at a guess leave the average investor down 15%(assuming a 70LTV and first charge)

SME lending with the crash would probably lead to investors losing more.

We are not in Ireland, but I have lent to Northern Ireland, and the 25% fall you mention might have been the average, but some places, including Northern Ireland, fell much more. Most people in Ireland in June 2007 didn't expect a 56% fall either. And neither do I, but I think that during even a 25% fall a not quite finished development will attract a much lower price than any of us would like.

I agree, I plan to do the same, others might too. Let's hope we are ahead of the rest. I am worried about correlation, most of the platforms have a small number of loans from an even smaller number of brokers or introducers. I would expect a higher default correlation between these than the market as a whole.

The other problem is that most loans aren't actually 70% LTV, they are loan to completed value, which is fine if they are completed. I don't look forward to selling a half completed project in a down-turn even if some of the money is still with the platform.
Good point on second charges, and it isn't always clear that is what you are getting. Another problem with second charges is that the first charge holder is likely to be in control of the sale, and in a difficult market might accept a lower bid than the second charge holder would want to accept.

I don't expect house prices will fall significantly soon. Even if they do I agree that most of us will still be better off than we would have been with a bank saving account. But if rates fall much further (perhaps because of ISA), it might be time to get out.