In this week's blog, as 2023 reaches its halfway point, many financial institutions and banks have posted their mid-year reports on the market, and their expert takes on where things are going next. We decided to run through a roundup of the top 4 and see what could be in store for Q3 & Q4 and how that compares to our views on lending, rates, and housing.

So let's jump straight in; first up. Blackrock. Interestingly their take begins with some friendly banking terminology, stating a switch in sentiment from Alpha to Beta regarding their outlook. An interpretation is that Beta is passive, for instance, index funds, & ETFs. Alpha investment strategies represent a more direct approach to investing, attempting to cherry-pick specific plays to outperform an index average. This can mean several things depending on if you are a "glass is half full or half empty" type of personality; a more pessimistic translation is that opportunities are less when the markets are predicted to be generally down, and a more optimistic view is that even under challenging conditions, there will be opportunities in asset classes outside of typical considerations. We share this sentiment when considering P2P as an investment class, and we are keen to espouse the virtues of it for obvious reasons.

Moving onto JP Morgan's mid-market review, they believe that inflation will continue retreating in the coming months across Europe and the UK, factoring in gains in food prices and energy dropping towards the end of the year, but they are taking the opposite approach in terms of the UK core inflation issues. Interestingly people's attempts to enjoy everyday life are once again blamed for the troubles we are facing, to quote, "households still seemingly intent on making up for the lost experiences in Covid times" are to blame for high demands for services. This is a remarkable stray into philosophy for a financial paper; the word 'intent' implies the sheer inconvenience of a joyful human experience to the masses must be somehow managed down to life resembling the unforgiving drudgery of an LS Lowry paintings workforce to bring balance back to the system - anyhow, we digress. Interestingly there is more recession talk here, with a strong belief that the tightness in the labour market and ongoing wage issues will continue the upward pressure until a recession hits.

Next up, Morgan Stanley, we commented on MBS offerings ever-increasing yields being a headache for mortgage holders in a previous blog and how that may now be a new opportunity in the market as the spreads, i.e. the difference in yield between that product and a typical government bond, is the same now as it was in 2008, but the leverage position of the mortgages is so much lower; therefore there isn't the same risk of product failure.

Interestingly even though this is an Amercian take on the market, there may be some clues here regarding where the UK may go with 30-year mortgages. In the US, the long-term fixed rate, as we have touched on before, is the established norm, and in the UK, the term "fixed rate" really is marketing, 2 - 5 year fixed products are essentially adjustable rate products, and that's for a good reason. Historically most mortgages in the UK are sold by building societies, and approx 50% of that money comes from deposits held on floating rates, so to prevent ALM or asset liquidity mismatch, the mortgages need to be variable. In the US, mortgages are largely packaged into securities on a Federal level by large holding businesses. Hence, the stability of the longer fixed product is much easier for fund managers to package, even if they only sometimes get the benefit of rate movement. Given where we are with mortgage rates, with typical Residential and B2L deals coming in over 6% and 6.3% at the time of writing IF the government does decide to incentivise long-term product offerings - that could be good news for developers refinancing onto long-term portfolio holds and providing some stability for landlords in general.

Lastly, we have the Citi Group mid-year wealth roundup document. Fixed income and bonds are back in a big way, according to their analysis, and the narrative hasn't changed much; a flight-to-safety approach, should a recession dawn, will bring people into long bonds and investment-grade corporate bonds, but interestingly again, it talks at length about investment managers having to search out new opportunities and positions for their clients to take advantage of a changing market. Could there be a seat at this table, on this level, for investment in the UK housing market via a conduit such as the P2P asset class? Breaking down the asset, you have a considerable demand, backed by the value of the UK housing market, the construction sector, and the government, and you have all the same trace elements and mechanics of bonds & fixed returns, only with a potentially higher return. Time will tell if this sector transitions into the establishment as we feel it will, but the ingredients & indicators are certainly all there.

Invest & Fund has returned over £150 million of capital and interest to lenders with zero losses, showing the rigour that governs our business.

To take maximum advantage of this robust and exciting asset class, please visit or contact Shaheel at

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 2mins to learn more.