A quarter of UK investors plan on using alternative finance in 2021

By Bridging Loan Directory 18th February 2021

A new survey of 975 UK-based investors has revealed the sentiment of investors towards alternative finance products. It found:

25% of investors plan on using an alternative finance product in 2021
33% have engaged with an alternative finance provider in the past 12 months
61% feel they lack sufficient knowledge of alternative finance products to consider using them
25% of investors rely on brokers when sourcing financial products

One in four investors plan on using an alternative finance product in 2021, new research by Market Financial Solutions (MFS) has revealed.

The bridging lender commissioned an independent, nationally representative survey of 975 UK investors, all of whom have investment portfolios valued at £10,000 and above.

It found that 25% plan on using an alternative finance product in the coming 12 months. This includes bridging finance and peer-to-peer loans.

When asked about their previous use of alternative finance, one third (33%) of investors said they had engaged with an alternative finance provider in 2020.

However, a significant majority admitted that they lack sufficient knowledge of alternative finance products to consider using them – this was the case for 61% of investors.

MFS’ research also revealed that 25% of investors rely on brokers when sourcing the right financial products. This number rises to 43% for millennials – those aged between 18 and 35.

Paresh Raja, pictured, CEO of MFS, said:

“Demand for alternative finance seems to be rising as a consequence of the pandemic.

With mainstream providers limiting their products and services to reduce their risk exposure, investors are being encouraged to consider alternative options.

However, there still exists a significant knowledge gap when it comes to the general awareness of alternative finance products and how they can be used as part of a broader financial strategy.

To address this knowledge gap, investors need to do their research and also engage with brokers who have a comprehensive understanding of the mainstream and alternative finance markets.”