With the bull market beginning to show signs of fatigue and markets starting to discount the risk of a slowdown across major economies in 2019, here we'll explain what that means for peer-to-peer (P2P) markets and how lenders can position themselves to hedge.
Typically, periods of equity sell-off and market volatility tend to see a flight to safety in bonds and more traditional vanilla products. This time though, after more than two years of steadily rising interest rates, we believe that 2019 could mark the peak in US treasury yields for the current business cycle meaning that the road ahead is likely to be bumpy.
Instead, we believe many investors may favour ‘selective’ property investment based on fundamental supply/demand trends that tend to weather cyclical downturns better than other assets. In this case, P2P property loans represent an adequate instrument for lenders wishing to get exposure to the property market from the short-term lending side.