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Post by stevefindlay on Oct 11, 2018 20:51:46 GMT
We are increasingly shifting ourselves towards being a property-lending platform, with over 85% of live loans secured against UK property. Driven by a cautious outlook.
To share some interesting stats:
- 56% LTV on average
- small scale refurbishment: every loan has either planning approved or done under permitted development
- four-fifths are 1st lien
- Geographically diversified - no more than 20% in one area
- 750+ live loans on the platform
- 70% refurbishment (no structural work) 30% development (including a very limited number of 'ground up' developments)
...and all set to achieve 6% pa net return after fees, losses and cash drag.
We are currently at 97% invested across the platform, so not a bad time to add funds if you're looking for your next investment.
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amphoria
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Post by amphoria on Oct 11, 2018 21:37:40 GMT
Well I am on 93% deployment so some people must be doing better than 97%.
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Post by portlandbill on Oct 12, 2018 10:48:42 GMT
91% for me
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alibaba
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Post by alibaba on Oct 12, 2018 11:15:48 GMT
98%
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garfield
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Post by garfield on Oct 12, 2018 12:44:06 GMT
We are both at 97% here, with 2% max allocations. I think that is the key to maintaining a good level of investment.
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zlb
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Post by zlb on Oct 12, 2018 19:54:41 GMT
We are increasingly shifting ourselves towards being a property-lending platform, with over 85% of live loans secured against UK property. Driven by a cautious outlook. To share some interesting stats: - 56% LTV on average - small scale refurbishment: every loan has either planning approved or done under permitted development - four-fifths are 1st lien - Geographically diversified - no more than 20% in one area - 750+ live loans on the platform - 70% refurbishment (no structural work) 30% development (including a very limited number of 'ground up' developments) ...and all set to achieve 6% pa net return after fees, losses and cash drag. We are currently at 97% invested across the platform, so not a bad time to add funds if you're looking for your next investment. how finely aggregated is this across different companies, which all fit these criteria? Will you continue to adjust underlying rationale to maintain rates? Smooth talk on property secured lending is something that some are wary of, particularity for development. How large is an "area"(max 20% invested here)? Thanks.
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Greenwood2
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Post by Greenwood2 on Oct 12, 2018 20:18:47 GMT
Unfortunately, once bitten, four defaults a load in recovery etc, what's to say this new investments emphasis will be any better? It was meant to be great first time around, only the best loans from the best platforms personally selected...
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Post by stevefindlay on Oct 13, 2018 7:07:13 GMT
This isn't a new emphasis, we've been heading this way over the last 18-24 months - to a conservative, secured portfolio backed by UK property.
The net performance, on average,to all clients, after fees, cash drag and losses has been 6% pa every year since 2015. And this recognises our conservative approach.
The only challenge for our platform right now is ensuring all clients get the average performance (narrowing the variation across individual client performance). It is not an investment performance issue. We have a solution for harmonising returns across all clients, and are awaiting FCA sign off.
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Post by stevefindlay on Oct 13, 2018 7:14:31 GMT
We are increasingly shifting ourselves towards being a property-lending platform, with over 85% of live loans secured against UK property. Driven by a cautious outlook. To share some interesting stats: - 56% LTV on average - small scale refurbishment: every loan has either planning approved or done under permitted development - four-fifths are 1st lien - Geographically diversified - no more than 20% in one area - 750+ live loans on the platform - 70% refurbishment (no structural work) 30% development (including a very limited number of 'ground up' developments) ...and all set to achieve 6% pa net return after fees, losses and cash drag. We are currently at 97% invested across the platform, so not a bad time to add funds if you're looking for your next investment. how finely aggregated is this across different companies, which all fit these criteria? Will you continue to adjust underlying rationale to maintain rates? Smooth talk on property secured lending is something that some are wary of, particularity for development. How large is an "area"(max 20% invested here)? Thanks. The areas are large: London, South East, South West etc We review every loan, so it's not that we apply the filters at the lending company level. There is a massive range of risk available in property developing lending. We are very much at the lower end. We do very little 'ground up' development - almost none. Planning permission or permitted development has to be in place for us. We focus more on refurbishment lending. Rates: we are seeing some decline in rates offered. We are able to negotiate higher rates as a bigger lender. We will not chase rates - if the risk is too high we won't lend.
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Post by stevefindlay on Oct 13, 2018 7:15:52 GMT
Unfortunately, once bitten, four defaults a load in recovery etc, what's to say this new investments emphasis will be any better? It was meant to be great first time around, only the best loans from the best platforms personally selected... And significantly more loans in live, with a net positive return at present?
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garfield
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Post by garfield on Oct 13, 2018 8:50:50 GMT
Steve, I'm interested as to how your property lending is split between residential and commercial. Also what are typical loan amounts, i.e. some indication of property types/sizes? We like your cautious approach and plan to invest more in the near future. Thanks!
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Greenwood2
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Post by Greenwood2 on Oct 13, 2018 9:03:28 GMT
Unfortunately, once bitten, four defaults a load in recovery etc, what's to say this new investments emphasis will be any better? It was meant to be great first time around, only the best loans from the best platforms personally selected... And significantly more loans in live, with a net positive return at present? I would hope so or I would be really really unhappy (but not near the projected 6.5% after fees).
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Post by stevefindlay on Oct 14, 2018 6:49:41 GMT
Steve, I'm interested as to how your property lending is split between residential and commercial. Also what are typical loan amounts, i.e. some indication of property types/sizes? We like your cautious approach and plan to invest more in the near future. Thanks!
The significant majority is residential. The commercial element is mostly office and industrial. We are very nervous about the UK high street - I don't think we have any loans against retail. Typical loan amounts are approx £300-400k on average. With some representing 2-3 flats, the loan per unit size is less. We looks for loans where the houses / flats are affordable in the local area once complete - can local workers (blue collar, white collar etc) realistically afford to live there.
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