Brexit: Where are we at with 100 days to go?
Today marks 100 days until the UK’s extended deadline to officially leave the European Union and the beginning of Boris Johnson’s premiership, with many hoping he will provide a fresh sense of direction to the leaving process.
Since Article 50 was invoked in March 2017, we’ve seen the exit date pushed back, several deal rejections and a long list of ministerial resignations. In fact, the process has become so drawn out that many of us have lost track of where we are – so, as the deadline draws closer, what is actually going on with Brexit?
Deal or No Deal?
Currently, MPs are in the process of reviewing and amending an extensive bill. The bill details a transition period, known as an implementation period, that will last 21 months. During this time, the UK will need to follow EU rules but will lose membership of all EU institutions. This period can be extended by up to two years, but such an extension would have to be agreed by the UK and the EU. The implementation period allows businesses and the government themselves to prepare for a future outside of the EU.
One of the most hotly contested points within the bill is the Irish backstop, an effort to avoid a hard border between Ireland and Northern Ireland. As part of this backstop, Northern Ireland will have closer ties with the EU than the rest of the UK and more of the rules and regulations of the European Union will apply to them.
Earlier this week, the House of Lords backed an amendment to the Northern Ireland Executive Formation bill which restricts our new Prime Minister Boris Johnson from suspending parliament to introduce a no deal Brexit before the deadline.
Property Prices
According to data from Which?, the average UK house price fell each month from August 2018 to April 2019. [1] This dip has been most pronounced across London and the South East, with several prominent Northern cities enjoying decent house price growth since the Brexit referendum. Of course, it is hard to say how much Brexit is responsible for either of these trends, with many arguing that the market is simply experiencing a correction following the astronomical growth it has experienced over the past five years or so.
Investment Trends
Using each country’s best-known indices as a guide, the UK stock market has underperformed since the referendum in comparison with America and Japan, albeit still delivering satisfactory results. The American Dow Jones indices report a 34% rise and the Japanese Nikkei indices report a 33% rise, with the UK’s FTSE 100 reporting a comparatively modest 15% rise. [2]
As for peer to peer lending, there has been a greater focus on investors diversifying their portfolio across different platforms and securities but overall, investment into the P2P sector remains strong.
What Next?
As new Prime Minister Boris Johnson has publicly stated, he is committed to leaving the EU by the 31stOctober with or without a deal. However, the fact that many of his colleagues in both Houses are committed to negotiating a deal before we exit could cause complications as Brexit’s final 100 days get underway.
As for what happens next, you’ll have to stay tuned! But in the meantime, if Brexit has made you re-think your investment strategy or even just raised some questions you’d like to ask, feel free to get in touch with the team on 01474 33 44 88 or email hello@wp1www.kuflink.com.
[1] https://www.which.co.uk/news/2019/07/what-will-brexit-mean-for-house-prices/
[2] https://www.investec.com/en_gb/focus/brexit/how-to-brexit-proof-your-portfolio.html
Unsure about peer to peer?
When you first start out investing, there’s a lot of information to take in. No matter how you choose to invest, you’ll find people that swear by one method, and others who have had a different experience. Peer to peer investing is a growing market and whilst we can’t guarantee the quality of every platform out there, we think the industry offers some fantastic opportunities to earn extra interest on your spare cash.
Many new investors ask us the same questions, so we thought we’d share our answers here, but please do speak to a member of the Investor Relations team if anything else is on your mind!
How do I know you’ll manage my money responsibly?
Peer-to-peer firms are regulated by the Financial Conduct Authority (FCA), who have recently introduced tighter rules on how we advertise and manage investments. The FCA monitor firms to ensure they are providing a fair and transparent service, and that everything is in order behind the scenes.
We’re also are answerable to the Financial Ombudsman Service, who can act as a mediator between consumers and financial providers in the event of a dispute.
Ultimately, peer to peer investing necessarily involves some degree of risk, and even the most well-managed firms can’t guarantee your returns or that you’ll get your money back in full. We encourage investors to carry out their own due diligence before investing and always diversify across different loans, platforms and security types.
Who is making the decisions?
It can be difficult to know where to start when it comes to evaluating platforms, but we think the team behind them is a great place to start. Luckily, we have a team packed full of expertise! To name a few:
· Our Co-Founders have decades of successful experience in property investment, from commercial ventures and buy-to-let portfolios to ground-up housing developments
· Our CEO has years of high-level experience with a variety of companies such as Prudential and Towergate Group
· Our Head of Lender Relations has forty years of mainstream bank experience and has worked extensively in credit risk for high-profile clients
· Our Head of Collections, who is also a Director, joined the company following a thirty-year career at one of the country’s biggest banks
· Our Chief Financial Officer recently left as Finance Director for Business Development at Barclaycard to join the Kuflink team
· Our Chief Technical Officer is a technical architect who has 15 years of experience in building scalable and robust technology
Where do you get your numbers from?
We use independent surveyors to assess each security property and share their valuation report in full with our investors. We also have two separate credit committees that scrutinise every aspect of a loan before agreeing to fund it, from valuations to exit plans and even borrower credit histories, with the sole aim of making our opportunities secure.
How can I keep up with my investments?
One of the advantages of this kind of investment is that there’s no need to check in every day, but all the information you need to keep track of your money is available 24/7 via the Kuflink platform. You can also head over to our brand-new website where you’ll find handy articles, tips and tricks to help you stay up-to-date with industry news and exciting opportunities. We’re also working on a Kuflink app, which will make managing your money easier than ever right from your phone!
Still have questions? Don’t hesitate to get in touch with us using hello@wp1www.kuflink.com or 01474 33 44 88.
Kuflink announces Southampton FC partnership
The Premier League club’s first-ever official peer-to-peer investment partner is set to become a familiar face at St Mary’s Stadium as matchday sponsors.
Kuflink Reports £50 Million in Bridge & Development Loans
Peer to peer lender Kuflink has reported surpassing £50 million worth of bridging and development loans. Kuflink is a UK based P2P lender serving the property market.
How risky is innovative finance?
Today, innovative finance individual savings accounts (IF Isas) offer anything from 4 to 12 per cent interest. That’s a very good incentive to buy one, particularly in this low-interest rate environment.
New Rules for P2P Platforms: Key Points from the FCA Report
The Financial Conduct Authority has this week released new rules for peer-to-peer platforms, which “focus particularly on credit risk assessment, risk management and fair valuation practices”. These rules are being enforced to help protect investors, especially those with less experience, and all platforms have until 9th December 2019 to implement them.
So what will they mean for investors? We’ve summarised some of the key points below, and you can read the full paper by clicking here.
Why are these new regulations coming in?
As with any investment, it is essential that peer-to-peer investors understand what they are putting their money into, and the fact that they could lose all or part of their investment.
Chris Woolard, Executive Director of Strategy and Competition at the FCA, said that these new rules were aimed at “enhancing protection for investors while allowing them to take up innovative investment opportunities…for P2P to continue to evolve sustainably, it’s vital that investors receive the right level of protection”.
The FCA wants to ensure that investors “have the necessary information about a platform’s services and charges to help them make informed decisions” and “have clear and accurate information about the investment risk of a product to make suitable investment choices in line with their risk tolerance”.
Introducing ‘appropriateness tests’ and investing caps
One of the most prominent changes is placing a limit on how much non-advised retail investors (i.e. those with limited investment experience and not receiving services from a financial adviser) can put in. These consumers will now have to self-certify that they will not invest more than 10% of their investible assets.
This certification will form part of a wider ‘appropriateness’ test, which will ensure that investors have at least a basic knowledge of the industry. Whilst the exact contents of the multiple-choice test have not been dictated, recommendations include:
- The understanding that P2P investments are not comparable with a savings account
- That there are no guaranteed returns and your capital is at risk
- That you may be unable to exit a P2P loan before maturity, even where a platform operates a secondary market
- The role of the platform and the scope of its services
New restrictions on how platforms market their services
From December onwards, platforms will only be allowed to send direct offer financial promotions (anything that invites people to invest) to investors that meet at least one of the following criteria:
- are classed as either a sophisticated or high net worth investor
- are classed as a restricted investor, meaning they have agreed not to invest more than 10% of their investable assets
- have confirmed before the promotion is made that they will receive regulated investment advice
Sharing wind-down plans with investors
P2P platforms are already required to have a wind-down procedure in place however, going forward, they will have to disclose a summary of this procedure before any investment is made. Platforms will be required to show that, even if they stopped providing a peer-to-peer service, suitable arrangements are in place to manage all existing loans and investments they’ve provided.
Will I notice any changes before 9th December 2019?
Platforms that offer home finance products are required to adopt some new rules with immediate effect, although other P2P platforms such as ourselves have 6 months to update their practices. As this is a final deadline, some changes are likely to be actioned before that point and some platforms may already be compliant with aspects of the new guidelines.
Do I need to do anything?
Investors don’t need to take any action, but it’s always a good idea to keep up to date with any news that could affect your investments. If you have any questions, we recommend reading the full FCA guidebook here or seeking regulated, independent financial advice.
Former Barclaycard director joins Kuflink
Kuflink has appointed Tim Spurr, former Barclaycard financial director, as chief financial officer and director of Kuflink Group.
A Techie in Number 10?
One of the favourites to be the next Prime Minister is tech enthusiast Matt Hancock. The MP for West Suffolk is the current health secretary and beforehand served in the equivalent role at Digital, Sport, Media and Culture. In both roles he has expressed a desire for the government to make more use out of technological developments.
In various speeches, Mr Hancock has called for ‘a culture of innovation’. Whilst working as the digital secretary, he oversaw the creation of the London Office for Rapid Cybersecurity Advancement (LORCA) which houses over seventy cyber security companies and focusses on ‘developing the cyber security technology of tomorrow’. In a speech at Tech Nation in 2018, Mr Hancock championed crowdfunding methods saying that the UK had ‘real strength’ in that area and his passion for technology continued when he moved into the role as health secretary.
Mr Hancock has announced that the use of pagers will be banned in the NHS, quite a big step when you consider 2017 research indicted that the NHS owned 10% of the world’s pagers. As an alternative, a ‘WhatsApp’ style communication method was piloted in an NHS trust in Mr Hancock’s own constituency. It’s not only pagers that are getting the chop, Mr Hancock has banned the NHS from purchasing fax machines with a view of phasing out the technology by April 2020 and making email the norm going forward.
The would-be leader has also formed the Healthtech Advisory Board where key NHS figures and tech industry stalwarts meet to help with creating policies with technological advancement in mind. Mr Hancock is already an influential figure, but should he get the top job, his enthusiasm for technology will influence more than just the NHS and influence every government department.
