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Post by ruralres66 on Nov 30, 2016 11:07:44 GMT
Hi, I would be grateful if somebody could help me understand RS bad debt data. The first 4 rows of the table below shows data in £000 published by RS here. I have multiplied the actual and expected debt rate by the total lent to estimate the debt in £000. The last row shows the "expected debt" less the "actual debt", which should be the debt still to materialise. And the last column expresses these three rows as a percentage of the total amount lent ... a weighted average of the percentages by year RS publish. Year | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 YTD | Total | Percent of total | Lent
| 11,813
| 32,805
| 104,781
| 293,405
| 517,987
| 600,244
| 1,561,036
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| Actual debt
| 0.58% | 0.90%
| 1.76%
| 3.31%
| 2.51%
| 0.70%
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| Expected debt | 0.59%
| 0.92%
| 1.93%
| 3.92%
| 3.65%
| 3.43%
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| Actual debt % x lent
| 69
| 295
| 1,844
| 9,712
| 13,001
| 4,202
| 29,123
| 1.87%
| Expected debt % x lent
| 70
| 302
| 2,022
| 11,501
| 18,907
| 20,588
| 53,390
| 3.42%
| Expected - actual
| 1
| 7
| 178
| 1,790
| 5,905
| 16,387
| 24,267
| 1.55%
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So my questions are: 1. What do RS mean by "Expected bad debt rate <2.8%" - is it the expected debt in total (which appears to be 3.42%) or the debt which yet to materialise (which only 1.55%) or something else? 2. What do RS mean by "Expected losses £18,690,301" as they appear to have already suffered 29,123 and expect another 24,267 to come. Just to be clear, I do not doubt the accuracy of the figures RS quote. I am trying to understand what the figures published on the Provision Fund Data page represent. Thanks, Mark
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Post by ruralres66 on Nov 22, 2016 11:06:09 GMT
Please see my other post on this thread about RS Sellout!
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Post by ruralres66 on Nov 22, 2016 11:03:46 GMT
Many thanks for sharing your experience and thoughts. I think this is an area which RS has left overdue for some dialogue and update of information.
It does need some outside scrutiny and independent expert analysis, which is beyond me as a relative "naive"... lender! I have approached FT Kadhim Shubber to see what he makes of it!
Come on RS, give us more info!
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Post by ruralres66 on Nov 19, 2016 14:17:24 GMT
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Post by ruralres66 on Nov 19, 2016 14:03:02 GMT
I am tracking general events and the threads on the forum in particular regarding the "health" and future prospects of P2P. I am doing a "DD", "what if" scenario and testing a Current sell out exercise. There are enough worrying signs, within and external in the industry for me to start getting cold feet about P2P and it's sustainability for me in particular. The Autumn Statement will soon be another pointer, especially if Phillip Hammond returns to printing money Q E and effectively underwriting bank loans and cheap money into the system. Firstly, I am trying to re understand how sellouts did work. I will work through this but any others with a similar interest or need might wish to help out with their understanding expertise. In August, I did a series of test and actual sellout events (and incurred quite high fees - which my tax statement from RS suggests is actually tax deductible). I am working though the past information and figures I gathered on this and wonder how RS recent changes to T&C may or may not impact on what was stated by RS in 2013, regarding sellout when I first signed up. www.ratesetter.com/blog/article/new_sellout_function_and_contract_changes_blogI remember that fees were more modest if you didn't do a complete sellout of a particular market. I suppose what worries me most is a drying up of borrowers and a withdrawal run with large percentage of lenders selling out. I am drawing down rapidly as others have also decided, however, I do have a significant footprint still of 6 figures, enough for a small house investment locally.
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Post by ruralres66 on Nov 18, 2016 13:37:23 GMT
Regarding diversification of investments, which is an approach my family have adopted since the 1990s, having got caught by a rogue Building Society "advisor" on PEPs, (yes, some of you may recall them!). Personal Equity Plans, otherwise known as PEPs, were introduced as tax-efficient investment vehicles during the 1980s and 1990s....became ISA's .....(look where they are now)!
Expecting a financial crash at the time, which came incidentally, we signed up and were given papers for a "capital protected" PEP. The advisor by slight of hand processed a different one!
I have never trusted an advisor to do my investing since!
Around that time, we were also being encouraged with "credit debt"- we resisted..... Extra in private pensions- we resisted and invested in a small property........
Modest shares were acquired "free"- Leeds BS - Halifax or inherited- poor overall and look where Lloyd's shares are now!
Lately, through unusual difficult family circumstances, the family retained and further invested in a parental family home, in the south east, which needed two years of work before rental. So no profit there!
- home in a modestly affluent coastal area, with no mortgage or debts, finally in very good refurbished order, rented out with very carefully picked tenants, fully agent managed- (due to distance from our home) with annual management cost of 10%, - rental for a person with no other income, so tax advantaged, only yields about 4- 4.5% all things considered. We have had no "downtime" of rental luckily.
A friend locally with a very bad tenant who lied, (supported by Shelter barrister - free to tenant) has lost 4 years of full rent and has lost thousands as the tenant rendered the house uninhabitable to get made homeless with Shelter's help! Not only that, they charge increased council tax due to it being empty and he will have little rebate, though they classed it as "uninhabitable." It will costs thousands to put right which he does not have and no rent either.
Moral is, though house prices as capital have increased, the bother and strife that can ensue even for those experienced, is substantial. The law is more on the side of the tenant and it needs careful, close and time consuming monitoring.
Also, as said here, there is little flexibility should you wish to access some of this equity as Capital Gains Tax will kick in and must be factored into the equation.
RS, ( and P2P, or not to P2P, that is/ was the question!) though risky, is a doddle by comparison! IMHO!
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Post by ruralres66 on Nov 17, 2016 7:52:38 GMT
I second that suggestion. Perhaps we should all make a formal written request for RS to deliver this on a dedicated web page?
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Post by ruralres66 on Nov 17, 2016 6:54:15 GMT
www.ratesetter.com/blog/article/responding-to-feedback-on-provision-fund-flexibilityThanks I see that Blog post has just appeared today. I will also however await their response since whilst the blog explains why they consider a ratio of well below 150%-125% as okay, due to this "discounted lifetime interest on existing loans" now being taken as a tangible PF asset (personally I am not convinced given it is illiquid, but it is an explanation), it does not answer: 1) Why the Projected Bad Debt increased from 2.6% to 2.8% on Monday 2) The Coverage Ratio falling 10% (129% to 119%) in 3 days. 9% of which on Monday. 3) Why on the PF page there are conflicting data sets (actual historic default rates 2014-16) . RS has previously indicated by email to me that they will confirm which of those numbers are correct and which are incorrect, presumably they will also correct the incorrect data. I have pasted the link to the blog. It took me at least a bit of time to find it. Thanks again, W35
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Post by ruralres66 on Nov 13, 2016 11:42:11 GMT
ι εκδηλώσεις θα λάβουν την πορεία τους, δεν είναι καλό να είναι θυμωμένος με τους? είναι πιο ευτυχισμένη που τους μετατρέπει σοφά με τον καλύτερο λογαριασμό.
Euripides
"Events will take their course, it is no good of being angry at them; he is happiest who wisely turns them to the best account."
(I confess, GCE O level Latin- failed!)
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Post by ruralres66 on Nov 12, 2016 13:18:40 GMT
It's ominously quiet on RS.
Are we all still in shock or are we resigned to future uncertainty toil and trouble? Or is silence golden?
Any update on the PF stuff?
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Post by ruralres66 on Nov 9, 2016 21:20:31 GMT
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Post by ruralres66 on Nov 9, 2016 9:44:49 GMT
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Post by ruralres66 on Nov 9, 2016 9:35:23 GMT
It really is "Finger to the wind " time folks............ www.youtube.com/watch?v=otyBh7rkix4 Who Knows Where The Wind Blows Chorus: Who knows where the wind blows Where will you be in the morning sunshine Who knows where the wind blows Where will you be in the morning Back at home I heard them say, two brothers sailed for America And they sailed away on a different day from the shores of emigration But in between the wind turned round, one blew north and one blew south And that was in the terror time when civil war was raging Johnny was the younger one, he found a home near Richmond Till a sergeant handed him a gun to fight the Yankee Union His brother tried to settle down some place north of Boston town Until he heard that bugle sound behind the flag of Lincoln And when the time it came to fight each believed that he was right And just as morning turns to night, two armies started fighting And memories drifted back to home and boyhood days in old Tyrone And brothers parting on the foam of the dark and stormy ocean And so it came to Gettysburg, in golden corn, the blood ran red In blue and grey, they fought and bled for different kinds of freedom And when it came to man-to-man, kill or be killed was the plan A brother died in a brother's arms on a sunny July morning
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Post by ruralres66 on Nov 9, 2016 8:49:57 GMT
It really is "Finger to the wind " time folks............
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Post by ruralres66 on Nov 8, 2016 18:05:31 GMT
You make some very pertinent points which would be good to share with Kadhim Shubber <kadhim.shubber@ft.com>? I feel this needs a good Independent journalistic airing as well on this independent forum?
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