theta
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Post by theta on Apr 11, 2023 12:55:31 GMT
While I'm here, I have a couple of suggestions for AE team:
- Change the price paid when buying/selling property to include the accrued interest, as opposed to treating the interest like dividend.
- Change the price increments in the exchange from approx 1% that seems to be the case now to 0.1%. I believe this will increase transaction volume as people would more easily find a price in the middle of the bid offer to transact, and make it more of a proper exchange!
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Post by BenAssetzExchange on Apr 11, 2023 16:39:16 GMT
While I'm here, I have a couple of suggestions for AE team: - Change the price paid when buying/selling property to include the accrued interest, as opposed to treating the interest like dividend. - Change the price increments in the exchange from approx 1% that seems to be the case now to 0.1%. I believe this will increase transaction volume as people would more easily find a price in the middle of the bid offer to transact, and make it more of a proper exchange! Hi and thank you for your analysis/feedback. I agree with much of what you say. I have a couple of observations before I comment on your suggestions. First of all you have new loans down as being originated at a flat 5%. I know this is just an approximation but we are looking at more like 7% in the current environment, plus the inflation link. I don't think we would work on any new loan sub 6.5% as things stand. Secondly, the comparisons to other P2P returns, in particular the higher yielding loans do not take into account risk. Of course anything could happen but we are not lending to third parties and while there is of course risk that house prices fall significantly I would hope our investors will not experience the pain I have felt on some of my historic personal P2P holdings on various platforms where some loans have seen significant write offs. ABL rate was mentioned and I am involved personally there and in a few others that forum readers will have experienced pain on. This could particularly be the case if the economy was such that interest rates were cut aggressively (which in turn could boost the property market). On your suggestions:- This is something we are looking at doing, it's just a case of priorities. The reason it as it is now is because originally the platform was set up to distribute variable BTL profits where there are regular voids, repairs, agent fees (to find a new tenant etc), bills etc. This made it impossible to accrue interest as we wouldn't know if later in the month the boiler would break and need a repair wiping out the monthly payment. This is also one of the many reasons we moved to the current model where the tenant is responsible for most repairs and there are no voids so the interest payment is fixed and predictable. Pricing increments is something we have thought about a lot. The problem with your suggestion is it may mean it makes things less likely to trade. There would be 10 times more price points and so we could see a lot more messing around, a bid £100 higher in the price of a whole house may not be particularly beneficial. We do however want to switch to round intervals and maybe just keeping them in straight thousands is the way to go. Problem is this is quite a big project as we are constrained by the legacy system but it is on the to do list. Thank you for the feedback/suggestions we are glad to hear it.
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theta
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Post by theta on Apr 11, 2023 18:12:07 GMT
you have new loans down as being originated at a flat 5%. I know this is just an approximation but we are looking at more like 7% in the current environment, plus the inflation link. I don't think we would work on any new loan sub 6.5% as things stand. To clarify, year 1 in this approximation was 2022, about the time I started investing at AE. At the time yields on the exchange were around 5%. This year would be year 2 in the illustration, where we see higher rates and correspondingly lower capital values, so total return slightly down, but rents have increased. My figures were a very rough approximation as you say, I just wanted to illustrate that capital value decline is shielded by the rent increase. Moreover any new investment or reinvestment happens at the new higher yield (6.5%+ now as you say) so eventual recovery happens faster. Pricing increments is something we have thought about a lot. The problem with your suggestion is it may mean it makes things less likely to trade. There would be 10 times more price points and so we could see a lot more messing around, a bid £100 higher in the price of a whole house may not be particularly beneficial. We do however want to switch to round intervals and maybe just keeping them in straight thousands is the way to go. Problem is this is quite a big project as we are constrained by the legacy system but it is on the to do list. I agree that it could result in a lot of messing about, but not that it would make things less likely to trade. If one is willing to trade "at market" when bid-offer spread is 1%, they would also trade "at market" if spread is <1%, and if they have to spread the order across 3 or 4 price levels if there's only a few quid at each level, it would still be better for them than paying for their entire order at the amount 1% higher. Of course if it's a completely empty order book regardless, it won't have any positive impact but I doubt it would make things worse. Perhaps try a gradual change, for example moving the increment to 0.5% and see if it helps or worsens things? Round 1k increments sounds nice but it would mean different % granularity for properties of different value. At the moment it's not a big problem but it could be in the future, so if I were to set a rule I would prefer a fixed % amount. Also round 1k increment would be for either the net or the gross price, not both, so for some investors inevitably it wouldn't appear as round increments depending on their preference. Regardless it's not a problem even keeping the existing system, but thought I mention it. Thanks for responding, engagement with investors is appreciated.
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upland
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Post by upland on Apr 28, 2023 7:04:07 GMT
Just logged on and there is a new question to fill in about what type of investor you are. Rather unsetteling and intrusive I feel , I dont like having to put figures to things like that and I dont understand why its needed. Its shades of the Selftrade problems several years ago that treated investors badly.
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firedog
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Post by firedog on Apr 28, 2023 7:26:23 GMT
Just logged on and there is a new question to fill in about what type of investor you are. Rather unsetteling and intrusive I feel , I dont like having to put figures to things like that and I dont understand why its needed. Its shades of the Selftrade problems several years ago that treated investors badly. I understand it's a requirement of every P2P platform. If you fit the 'sophisticated investor' option, you don't need to enter any figures.
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Post by overthehill on Apr 28, 2023 8:01:03 GMT
Just logged on and there is a new question to fill in about what type of investor you are. Rather unsetteling and intrusive I feel , I dont like having to put figures to things like that and I dont understand why its needed. Its shades of the Selftrade problems several years ago that treated investors badly.
They are not the hmrc or vat office, just underestimate and make up some figures. There is no crime being committed. Lower the better as it's great marketing data for them, yes no doubt they are not allowed to use it !!
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eeyore
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Post by eeyore on Jan 9, 2024 13:52:13 GMT
...... But then I don't understand the risk assessment categories "Low", "Low-Med", "Med", etc. Are these based on any sort of objective basis or what? ....... The risk assessments are done on an objective basis although as I mentioned earlier in this thread we are looking to roll out a new framework which will take into account factors such as the price the loan is trading at on the Exchange. Currently we give it a risk rating based on 8 factors (such as price paid v rics value, type of property etc) and the overall rating is the average of these factors. I agree there needs to be more transparency and the goal is to have the new framework completely visible to investors and potential investors who will be free to challenge any assessment we have made, indeed we welcome such challenges as it will help us to improve the process. Assetz Exchange have just released a new description of how the risk labels, ''Low" - "High", are assigned. It's available at: assetzexchange.co.uk/risk-framework/PS: the risk calculation includes an "Armageddon score" which apparently is the total collapse of the borrower.
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Post by BenAssetzExchange on Jan 9, 2024 14:07:46 GMT
....... The risk assessments are done on an objective basis although as I mentioned earlier in this thread we are looking to roll out a new framework which will take into account factors such as the price the loan is trading at on the Exchange. Currently we give it a risk rating based on 8 factors (such as price paid v rics value, type of property etc) and the overall rating is the average of these factors. I agree there needs to be more transparency and the goal is to have the new framework completely visible to investors and potential investors who will be free to challenge any assessment we have made, indeed we welcome such challenges as it will help us to improve the process. Assetz Exchange have just released a new description of how the risk labels, ''Low" - "High", are assigned. It's available at: assetzexchange.co.uk/risk-framework/PS: the risk calculation includes an "Armageddon score" which apparently is the total collapse of the borrower. Hi eeyore, Happy New Year. Thanks for highlighting this release. Just to clarify a couple of things here. The armageddon score relates to the tenant, not to the borrower. We do not lend money to third parties. We lend money to stand alone companies, controlled by us in conjunction with the Lenders who then purchase the properties we let out. Even then the score does not relate to the collapse of the tenant, a score is given if there is an 'armageddon clause' contained within the lease we have with the tenant. A couple of our tenants have these clauses and they allow them to exit the lease without penalty in extreme circumstances, such as losing government funding for the scheme. It has nothing to do with the creditworthiness of the borrower which is included in the 'Rental counterparty credit score'. To date no armageddon clause has been triggered, indeed no break clause whatsoever has ever been triggered.
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eeyore
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Post by eeyore on Jan 10, 2024 15:14:38 GMT
Ben, thanks for the correction and the detailed clarification.
What I was highlighting was the use of the term "armageddon". In the P2P universe, failure of the tenant/borrower/whatever for a single loan isn't what I'd call armageddon - we see that happening all too frequently. We'd be getting closer to armageddon with the failure of the platform and its descent into administration inevitably taking the bulk of the value of lenders' funds with it - if only there was an objective (and reliable) measure for the risk level of each and every P2P platform...
In my universe, armageddon is the complete wipe-out of the telecommunications network - almost everything would stop. Or the ceasing of the production of Marmite - events that mean that life is no longer worth living!
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Post by BenAssetzExchange on Jan 10, 2024 16:26:58 GMT
Ben, thanks for the correction and the detailed clarification. What I was highlighting was the use of the term "armageddon". In the P2P universe, failure of the tenant/borrower/whatever for a single loan isn't what I'd call armageddon - we see that happening all too frequently. We'd be getting closer to armageddon with the failure of the platform and its descent into administration inevitably taking the bulk of the value of lenders' funds with it - if only there was an objective (and reliable) measure for the risk level of each and every P2P platform... In my universe, armageddon is the complete wipe-out of the telecommunications network - almost everything would stop. Or the ceasing of the production of Marmite - events that mean that life is no longer worth living! Hi, Yes I agree armageddon is a strong word but "armageddon clause' is not our term. It is quite commonly used by supported living providers and also in other contracts. It does just mean a party can exit the contract in extreme circumstances. If this were to happen it would be unfortunate but we would simply look to let the property to another organisation or failing that sell it to repay investors.
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Post by bingo on Feb 18, 2024 0:46:17 GMT
I'm trying to understand how AE works and how investments are displayed in the AE exchange, given that all the 'Sells' seem to be all mixed up in the exchange, which is different to many platforms that separate out the investments released onto the platform from those in their secondary market.
Can someone explain the process of a new investment being released onto the AE platform and how they are shown in the 'exchange'?
As I understand it the properties are bought by 'founder investors' who are then obliged to sell their share at a mandated, fixed price (for a certain length of time?).
Is it possible to distinguish a new investment that is at this 'release' stage when looking at the exchange (or, I guess, which 'Sell' entries are from these 'founder investors' at the mandated price, as there could be immediate re'Sells' that aren't from the 'founder investors'?)?
On other platforms, the investments at the 'release' stage are normally separated from the 'secondary market', so it's clear whether you are buying at the mandated price or one chosen by the person selling (which may be a 'bargain' or a 'rip-off').
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loadsahope
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Post by loadsahope on Feb 18, 2024 15:02:38 GMT
No you can't differentiate. However the 'headline' information for the property clearly shows the original purchase price, the percentage change since purchase, and also the percentage change of the house prices index for the type of property over the same period. You can also see other recent transactions for each property, giving you an idea about how the current price at which someone is willing to sell stacks up against other recent sales. So it's all very transparent.
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Post by BenAssetzExchange on Feb 19, 2024 12:05:21 GMT
I'm trying to understand how AE works and how investments are displayed in the AE exchange, given that all the 'Sells' seem to be all mixed up in the exchange, which is different to many platforms that separate out the investments released onto the platform from those in their secondary market. Can someone explain the process of a new investment being released onto the AE platform and how they are shown in the 'exchange'? As I understand it the properties are bought by 'founder investors' who are then obliged to sell their share at a mandated, fixed price (for a certain length of time?). Is it possible to distinguish a new investment that is at this 'release' stage when looking at the exchange (or, I guess, which 'Sell' entries are from these 'founder investors' at the mandated price, as there could be immediate re'Sells' that aren't from the 'founder investors'?)? On other platforms, the investments at the 'release' stage are normally separated from the 'secondary market', so it's clear whether you are buying at the mandated price or one chosen by the person selling (which may be a 'bargain' or a 'rip-off'). Hi bingoAll of the property purchases are originally funded by loans from a pool of 'underwriters' for which they are paid a fee. This allows us certainty of funding when it comes to exchange/completion. We force all underwriters to sell 50% of their original holding at the price they paid for a period of 14 days which allows our entire investor base to buy in at the original purchase price. Underwriters are free to sell more of their holding if they so wish. There isn't a distinct stage for this selling, all investors once a property is launched can place buy and sell orders in the market as they wish. As has been mentioned though the original purchase price is clearly stated so it should be clear what is going on. If you have any difficulties please contact our Helpdesk and we would be pleased to explain in more detail.
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Post by overthehill on Mar 22, 2024 15:12:03 GMT
How many ex assetzcapital and property partner investors are investing money here ?
It looks very very similar to Property Partner.
Even with more competence and better luck, there still isn't enough profit to go around and you know what that means.
Buying in and selling up would be the way to do it. Don't wait until no one wants to buy as disposal of the property can be a costly (not covered by current valuation) and time consuming drag on your portfolio especially if it is multi-unit.
Property Partner bought badly, overpaying for over-valued property in a poor state and their upbeat prospectus of investor dividends and the visible and not so visible costs turned out to be fantasy. They also had bad luck with the cladding scandal and covid19.
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firedog
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Post by firedog on Mar 22, 2024 16:06:18 GMT
I was never interested in Property Partner so I can't comment on any supposed similarities.
But I was in Assetz Capital for a bit and Assetz Exchange feels very different. Very happy with it*.
* As in, I value the social value of what they're doing, returns are okay and likely to get better, are paid promptly every month and communications are excellent.
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