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Post by moneyball on Aug 8, 2014 19:29:58 GMT
Just updated my charts and they seem to indicate that the current MR for the 5yr market is simply on its "current floor." Which if correct, means expect them to uptick and stay within the 6.0% - 6.4% range for the month..... UNLESS!!!!....
...you believe that this week is the start of a new downward trend for rates over the next few months. If you do, now would be a good time to lock in if you want to get involved in this market.
Please note though, that a sudden mass of lending cash appearing in a short space of time doesnt, by itself, indicate a downward trend. Especially with an overall market that RateSetter finds itself in right now (escalating growth etc.)
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spiral
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Post by spiral on Aug 9, 2014 16:01:48 GMT
Please note though, that a sudden mass of lending cash appearing in a short space of time doesnt, by itself, indicate a downward trend. Especially with an overall market that RateSetter finds itself in right now (escalating growth etc.) I agree but many people get impatient if their money hasn't gone out within a day leading to everyone undercutting everyone else. Currently there's 240k @ 6.1% and 830k @6.2% with a further 500k or so >6.2%. My guess is that the 6.1 will be continually topped up with the 6.2% barely getting a look in never mind the 500k above that. This leaves some 1m+ of funds that I believe are not placed for lending in the next few days and a lot of those I suspect will cut their rates in order to lend more quickly. Let's hope I'm wrong. BTW, there's 1 lender with 15k at 16.5%. Do you think it was meant to be 6.5% when placed?
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Post by davee39 on Aug 9, 2014 16:32:23 GMT
Please note though, that a sudden mass of lending cash appearing in a short space of time doesnt, by itself, indicate a downward trend. Especially with an overall market that RateSetter finds itself in right now (escalating growth etc.) I agree but many people get impatient if their money hasn't gone out within a day leading to everyone undercutting everyone else. Currently there's 240k @ 6.1% and 830k @6.2% with a further 500k or so >6.2%. My guess is that the 6.1 will be continually topped up with the 6.2% barely getting a look in never mind the 500k above that. This leaves some 1m+ of funds that I believe are not placed for lending in the next few days and a lot of those I suspect will cut their rates in order to lend more quickly. Let's hope I'm wrong. BTW, there's 1 lender with 15k at 16.5%. Do you think it was meant to be 6.5% when placed? What you have just described is a fully functional perfect market. Now, if I formed a 'lets keep Ratesetter rates high' group on facebook, and all 200 000 members agreed not to bid below 6.5% we would be more like an energy company.
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c88dnf
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Post by c88dnf on Aug 9, 2014 18:04:50 GMT
Hmmm. I've been away from home so missed the start of this thread, but coming in "cold" it looks more to me as if the wave crest has passed, with nearly £300k less on the 5-year market than Thursday night. Market rate this Saturday evening is at 6.1% with a dribble of £1,000+ at 6.0%. IMHO Ratesetter is proving very able to absorb large inflows and get them loaned out quickly.
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oldgrumpy
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Post by oldgrumpy on Aug 9, 2014 20:03:30 GMT
Yep! I've adjusted to 6.1% today - got 6.2% yesterday on some bits near the front of the queue. Jolly G! Took a couple of days but the 6.1% reached the front of the queue this evening. Meanwhile, there is around £244K still to go on 6.1% and £833K steaming away in 6.2%!
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duck
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Post by duck on Aug 9, 2014 20:15:11 GMT
I'm finding this all a bit surreal, I remember reading a whole lot of posts a few months ago wondering if 5yr would reach 6% ..... and now with 6.0 available the issue of not being able to get 6.2% is a talking point.
Looking back in my records I note that before May this year the last time I managed +6% (5yr) was January 2013.
Yes I would love the spike of late June/early July to return but in the meantime I'm happy to re-invest at +6%.
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pikestaff
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Post by pikestaff on Aug 10, 2014 7:29:58 GMT
duck, I'm not worried at all by this small drop. The real question is where will it stop? If it persists, the excess of funds now on the platform could drive the rate all the way back to 5%, or less. My personal view is that a fair price for the risk is somewhere around 4.5-5%. I think rates have been higher than this because RS have grown their distribution network faster than their lender base. I expect this to continue in preparation for p2p NISAs coming on stream, which they must expect to bring a step change in lender funds. So, for what it's worth, I do not expect rates to fall far below 6% until p2p NISAs become available. But, when they appear, rates could well fall sharply. A 5 year RS NISA at 4.5% would tempt many.
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Post by mill750 on Aug 10, 2014 8:07:12 GMT
I'm finding this all a bit surreal, I remember reading a whole lot of posts a few months ago wondering if 5yr would reach 6% ..... and now with 6.0 available the issue of not being able to get 6.2% is a talking point.
Looking back in my records I note that before May this year the last time I managed +6% (5yr) was January 2013.
Yes I would love the spike of late June/early July to return but in the meantime I'm happy to re-invest at +6%. Agree! Just received a letter from my customer friendly high street bank , telling me how pleased they are to continue my savings rate at .49 %, a true premier service ! . 6.0% seems quite attractive
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Post by davee39 on Aug 10, 2014 8:49:45 GMT
The rate trends graph, under Ratesetter info, proves the point above.
I started two years ago and was reasonably happy with 5% since this matched the rates on most of my maturing BS bonds, it was also the rate I had used to plan my retirement income. The rate then jumped to around 5.6%, which I did not expect to last, and more recently 6%+.
The very high rates are not sustainable since despite RS innovation in attracting high APR borrowers, it reduces demand from high quality 5 yr borrowers when competitors (Cash rich lenders using free government cash) have dropped LOAN rates to below 4%. Furthermore, as has also been discussed, the larger RS becomes, the lower the risk premium demanded.
ISA's will really shake the market. Assuming they are available in 2015 (I still suspect they will be re-announced in the next budget, but may not start until 2016 due to IT changes needed) I see a 5% 5 year rate becoming the norm, this will be at the time of the first baby step interest rise from the BOE. It would not surprise me if rates moved in 0.05% increments next year, allowing Banks to ignore the rises for savers.
One challenge for managing ISA's is that assuming they only allow new money, it could be attractive for lenders to cash in existing loans at a penalty to re-invest tax free. This could distort cashflows and lead to unstable rates.
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duck
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Post by duck on Aug 10, 2014 10:03:45 GMT
duck, I'm not worried at all by this small drop. The real question is where will it stop? If it persists, the excess of funds now on the platform could drive the rate all the way back to 5%, or less. ......... Oh I realised where you were coming from but I was really making 2 points 1. The current 6% is certainly competitive (when taking into account the full RS offering) 2. Cash on offer has been lower at the same time that rates have been lower
I keep a keen eye on the rates since I have to reinvest every weekday (6 figure sum invested) and in the recent past I haven't had to dip below my comfort zone in order to get money lent out. 2 days max does it for me.
As for where will it stop, I'm sorry but my crystal ball is broken ......
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spiral
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Post by spiral on Aug 10, 2014 10:45:25 GMT
I agree with most of what's said above and am not unhappy with current rates. It's just in this day and age when most of the fun has been taken out of P2P lending (well for the perceived lower risk platforms anyway), the only fun to be had is guessing which way the rate will trend on RS.
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Post by p2plender on Aug 10, 2014 12:15:11 GMT
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Post by davee39 on Aug 10, 2014 13:06:44 GMT
Isn't there some small print somewhere about 'shares can go down as well as up'? I am, however, delighted that you have chosen to invest elsewhere since it will help support the rates for the rest of us.
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Post by johnny on Aug 10, 2014 14:12:11 GMT
We all have different risk/reward thresholds. Its funny, I have been reducing my exposure to shares over the last couple of months and investing in RS. Ukraine/Gaza/ Iraq and a long bull run makes me nervous.
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Post by wildlife2 on Aug 10, 2014 16:02:02 GMT
I joined ratesetter a few months ago and managed to get 6.8 in 5yr market at very end of June after starting out with just 5.6, I wanted to put money in 1 year option if it was 4% or above but now seems to be in line with monthly rates. Does the 1 year rate ever reach 4% or more?
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