Risk Summary

Estimated reading time: 2 min

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

1. You could lose the money you invest

  • Many peer-to-peer (P2P) loans are made to borrowers who can’t borrow money from traditional lenders such as banks. These borrowers have a higher risk of not paying you back.

  • Advertised rates of return aren’t guaranteed. If a borrower doesn’t pay you back as agreed, you could earn less money than expected. A higher advertised rate of return means a higher risk of losing your money.

  • These investments can be held in an Innovative Finance ISA (IFISA). An IFISA does not reduce the risk of the investment or protect you from losses, so you can still lose all your money. It only means that any potential gains from your investment will be tax free.

2. You are unlikely to get your money back quickly

  • Some P2P loans last for several years. You should be prepared to wait for your money to be returned even if the borrower repays on time.

  • Some platforms may give you the opportunity to sell your investment early through a ‘secondary market’, but there is no guarantee you will be able to find someone willing to buy.

  • Even if your agreement is advertised as affording early access to your money, you will only get your money early if someone else wants to buy your loan(s). If no one wants to buy, it could take longer to get your money back.

3. Don’t put all your eggs in one basket

  • Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well.

  • A good rule of thumb is not to invest more than 10% of your money in high-risk investments.

4. The P2P platform could fail

  • If the platform fails, it may be impossible for you to collect money on your loan. It could take years to get your money back, or you may not get it back at all. Even if the platform has plans in place to prevent this, they may not work in a disorderly failure.

5. You are unlikely to be protected if something goes wrong

  • The Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover investments in P2P loans. You may be able to claim if you received regulated advice to invest in P2P, and the adviser has since failed. Try the FSCS investment protection checker here.

  • Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated platform, FOS may be able to consider it. Learn more about FOS protection here.

If you are interested in learning more about how to protect yourself, visit the FCA’s website here. For further information about peer-to-peer lending (loan-based crowdfunding), visit the FCA’s website here.

The View From Northern Ireland

News Case Studies 19 Feb 2024
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Funding one of the UK's fastest growing markets

Q: The average house in Northern Ireland now costs around £10,000 more than it did one year ago. According to the latest Halifax House Price Index, house prices in NI increased by 5.3% in the 12 months to January 2024, the fastest annual rate of any UK region. As Blend’s Lending Manager based in Northern Ireland, how do you see market activity being on the ground?

A: It is well known that Northern Ireland suffers from a lack of housing stock.  The demand is outstripping supply, and this is one of the reasons why prices are continuing to rise.  Even last year when mortgage rates were at their peak, houses were continuing to sell at and above asking prices. 

In terms of activity levels among house builders, they were lower than normal last year.  For builders, they really have had a perfect storm as increased build costs, increased finance costs and uncertainty about whether the selling prices of their finished units could come under pressure, meant that it was an undesirable time to start new projects.  It’s reassuring to see that prices have held tight, as this at least gives builders the confidence to know what prices they will achieve for their finished schemes.    


Q: Blend has supported property developers in nearly every county of Northern Ireland. What sets Blend apart from other lenders? Why do property developers choose to borrow from Blend?

A: Here at Blend, we’ve been supporting Northern Irish property developers right since we started back in 2018. We’ve always been really committed to the region, even when there are not many development finance lenders who are actively lending here. Northern Ireland is one of the most affordable places to live in the UK, yet it suffers from a steep housing shortage. So, we’re here and are committed to supporting mid-size property developers who are building the homes the region needs. As to what sets us apart, I’d say it’s the fact that we don’t just talk the talk, we actually walk the walk and deliver what we say to developers. Over the past 18 months, it’s been a very difficult market for property developers and many have seen how their lenders pulled back on facilities they had agreed to lend on. At Blend, we deliver what we say we will from day 1. Another important point that sets us apart is our agility and ability to get things done. Being a specialist lender rather than a Bank, we can be less dictated by policies and more driven by what makes good commercial sense.  You also can’t beat good old customer service and quick decision making – because in property development, time is money!


Q: What are your predictions for 2024 for Northern Ireland’s housing market?

A: Simply put, it’s my view that house prices will continue to push northwards.  Northern Ireland is one of the most affordable places to buy housing in the entire UK, and it’s a great place to live.  I believe that our housing market will come under continued outside pressure, mainly from people settling and/ or investing from ROI and GB.  I feel that falling interest rates will fuel this, by arming people with the affordability to bid prices up. 

In terms of house builders, I believe their activity levels will increase to a more normal level.  Material prices appear to have stabilised, or in some cases, such as timber prices, have reduced.  The cost of finance will likely reduce in line with BOE base rate.  What would really help house builders is if the return of power-sharing meant that some changes could be made to increase the speed of obtaining planning permission; and for there to be a significant investment in the sewer capacity, both of which are material contributors to the shortage of housing. 


Q: The most recent scheme you’ve funded is a scheme of 4 townhouses and 11 apartments in Holywood. Walk us through this scheme and tell us more about it, what the developer is trying to achieve and how was Blend able to support him.

A: Holywood has everything you could want from a place to live.  It’s a lovely town and is easily commutable to Belfast.  The latest scheme we’ve funded will offer new homes with sea views, which are within easy walking distance of the town centre.  The developer has designed a scheme which makes the most of its views. It will be suited to families, professionals and downsizers.  The customer had acquired the site some time ago, and we provided a development facility to fund the full construction costs.   It’s a project we’re delighted to be involved with.

Blend is a specialist development finance lender that works with experienced mid-sized property developers in the UK.

For more information, please visit www.blendnetwork.com or email us at enquiries@blendnetwork.com

BLEND Loan Network Limited is authorised and regulated by the Financial Conduct Authority (Reg No: 913456).

BLEND Loan Network Limited is registered in England and Wales. Registered office: Evelyn House, 142 New Cavendish Street, London W1W 6YF.

Don’t Invest unless you’re prepared to lose money. This is a high-risk investment. You may not be able to access your money easily and are unlikely to be protected if something goes wrong. Take 2 mins to learn more.

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