Assetz Capital exits peer-to-peer lending

Property lending platform Assetz Capital is stopping peer-to-peer lending to be funded by institutional investors only. Existing retail loans will be run off in a few years. Assetz Capital points to rising interest rates and lowering demand as the reason.

Assetz Capital is a real estate investment platform from the United Kingdom. To date, the service has raised around 1.5 billion pounds in total from over 41.000 investors.

P2P loans run off in next 5 years

Assetz Capital made the announcement on their website. From now on, individual investors can no longer fund projects on the investment platform. Existing peer-to-peer loans will be run off in the next five years.

In 2020, 80% of lending was institutionally funded.

The UK-based funder has been building out its institutional branch for some time. In 2020, around 80 percent of all lending was institutionally funded, Assetz Capital says.

Raised interest rates

The company points to rising interest rates and lowering demand as the reason for the decision. Just months ago, Assetz Capital raised its target interest rate for P2P accounts from 3.75 to 3.9 percent per year.

This initially resulted in ‘healthy net inflows of capital’, the announcement reads: “However, after continued bank interest rate rises, retail investors were withdrawing capital on a net weekly basis.”

‘Almost no demand’

The statement from Assetz Capital continues: “With almost no demand today from retail investors for the products that we can offer in the face of higher interest rates and the wider economic conditions at present, we must move on in order to effectively support the continued growth of the small housebuilder and to give SME businesses access to capital in the form of property secured lending.”

“We expect larger funding in 2023.”

Lastly, the company says closing down its P2P lending branch will not impact current or new lending: “Our other business aims remain just as strong, even stronger given larger expected funding lines into 2023.”