Falling rates

I think it's a case of borrowers and/or AC trying to work out what the market will bear, so we're probably looking at a swinging pendulum. 

There are four loans available at the moment -- all offering in the 9-10% range -- and none are attracting a lot of lenders.  Yes, large wind turbine loans always have required underwriting, but seeing three small loans -- £135k, £200k, and £335k -- not funded quickly is a big change from what would have been expected just a few months ago.  Bringing in underwriters to allow those small loans to proceed is an expense for AC, and they have to weigh up the balance between that cost and the cost of offering lenders more interest so that underwriters aren't necessary.  It's a trial and error process, made more difficult by being in a market/competitive situation that has variability to it.

It looks to me like the pendulum has swung too far toward low rates, and if AC continue to have trouble filling loans quickly they may find they need to be more attractive to lenders in order to be more attractive to borrowers by showing that they can fund loan requests easily and without delay.

Interesting contrast.

On AC nothing on offer above 10%, on TC (if you ignore TLC 23) nothing below 10%.

From my perspective bidding is limited on the small loans because I have no more shadow bid availability.  it's all queued up on loans which await drawdown - and some are waiting forever.  By the way, what determines the shadow bid limit?  Is it a percentage of actual (current) investment?  I cannot relate my limit to anything and can find nothing on the AC website to explain (not that the website explains much anyway).

Thanks everyone for your contribution. The way I see it is that we are reaching/almost reached a saturation point whereby AC have become far too reliant on underwriters & u/w, as someone said, do not have bottomless pockets. I, for one, decided to reduce how much I put into each loan to much smaller amounts & sometimes none at all as the AM is awash with units that are selling at a snail's pace. This, coupled with lower rates, and higher rates offered elsewhere for similar proposals, is causing stagnation.

One solution is to prop up rates to the 12% mark again & more importantly minimise the dreaded drawdown windows to get the 'normal' investor contribution going again

But to a certain extent loans that fill slightly slower is a good thing as it provides more time for due dilligence and reflection rather than the panic buying of "yesterday". Remember Bolton, a similiar size to these, filled in less  than 5 minutes if I recall correctly.

£135k (West London) 9%  anonymous borrower / anonymous property as security (a few more details given in Q&A now as a result of my question a few days ago). Speculative / bubble pricing in most of inner London this year (asking prices typically 25% up on Zoopla estimates, so 35% up on prices 12 months ago) gives short term risk of over valuation of security. But its a five year loan, so I'm in.

£200k (Notts) 10%  young "property tycoon" could find cashflow tight as interest rates rise, but loan covenants should force the sale of part of the portfolio.   Bidding has been open 7 days and no sign of the security valuation report (I've just asked a Q to give AC a prod).  I'm in (despite the missing valuation report, because I had expected this to fill quickly, and as a small loan I'll be able to exit via SM in due course if I decide against)

£335k (Worcs) 9.5% retained interest.   Haven't had chance to study this in detail yet. Valuation report not available.


For those without shadow accounts, the drawdown period for the latter two as 18 and 12 month loans respectively shaves a noticable amount off already lowish rates. When a competitor platform is able to offer 12% from the moment funds are committed to a loan, it is hardly surprising that these AC loans are not flying off the shalf.



I'm fast approaching being fully invested, but about a third of my P2P loans are due to mature in the next six months, so I'm unlikely to participate in many of the larger underwritten loans on AC in the immediate future until some of the 6 month bridges on AC and SS release funds.

I think there's a general aire of underestimation of our friends the underwriters. Their pockets are bottomless.

I think AC is happy enough for the second tranche of London Retail & the second, third and fourth of Midlands to never fully sell down on the AM if need be. I think AC are doing somethings to ensure they have a great reputatation in 'banking' This is a very new medium and we haven't had our first scandal yet so it's best to be scrupulous, if you can afford to be.

I think completion may also be a factor. There have been a number of new entrants over the last year all keen to make a mark. Additionally FC have encroached on AC's patch by entering the property finance market at rates between 6 and 8%. Finally in the current climate the failure of FF cannot be helping. However once FF is sorted out and investors see the benefit of investing with a business that seeks tangible securities to back its loans then the situation may well become a very positive one.