Ukmikk
Member of DD Central
Posts: 445
Likes: 298
|
Post by Ukmikk on Mar 10, 2019 12:33:22 GMT
Hi, am not currently a CP investor but I'm interested in getting on board in the next ISA year. I've been reading this thread with interest. Surely it wouldn't be too difficult to implement some kind of proportional allocation in relation to pledge size so that all investors who have pledged get at least some allocation in proportion to the size of their pledge. That way everybody gets a piece of the action and should satisfy large and small investors alike. Or am I missing something? My other concern, which might hold me back, is the high transfer out fee, which could become an issue if things aren't working out well on the platform.
|
|
|
Post by Ace on Mar 10, 2019 14:31:00 GMT
I can't personally decide whether the current system (everyone gets what they want up to a certain amount), or everyone being scaled back by the same percent, is fairer. The current system seems to be working well for small hitters, such as myself. I only want £400 per loan and have achieved that in both auto-invest loans issued so far. It may deter some big hitters, but I doubt that many of them are too bothered with platforms that return under 8%.
I totally agree with you on the transfer out fee. CP have removed fees in the past when it was pointed out that they were out of kilter with the industry average, so worth doing some research and presenting evidence if this is the case with the transfer out fee.
|
|
Ukmikk
Member of DD Central
Posts: 445
Likes: 298
|
Post by Ukmikk on Mar 10, 2019 18:42:50 GMT
Well none of my current ISA providers charge any transfer fees either way and I've tended to avoid those that do as a matter of principle.
|
|
|
Post by CrowdProperty Representative on Mar 11, 2019 13:59:19 GMT
Hi Ukmikk,
Thank you for your interest in CrowdProperty, and thank you, Ace, for your useful comments.
To address your point regarding proportional allocation, we considered all possible options when evaluating the best way to ensure we’re meeting all our lenders’ needs. We came to the decision that pledge limits were the preferable route of action over proportional allocation.
The reason for this is if loans were to be allocated proportionally, lenders may start pledging more than they are able to invest, thinking eventually their investment size would be scaled back. Just as was the case with London Olympics Tickets, people inevitably apply for more than they can afford to increase their chances of success. This leaves everyone in a worse position in the long term if people cannot fulfil what they have pledged for.
We’ve found the response to our pledge limit implementation overwhelmingly positive; significantly more lenders have been able to successfully pledge towards each project. We’ve also had incredibly positive feedback for our AutoInvest product, which allows investors of all sizes to invest and diversify easily across CrowdProperty projects. These solutions seem to have largely resolved lender issues.
With regards to the transfer out fee, when we rolled out our ISA product this time last year, we conducted extensive research across the market to evaluate what were reasonable conditions. At that time, transfer out fees were common place and therefore were introduced. We’ve taken some time to re-evaluate the market and have found, as you have, that some (but not all) platforms have removed their transfer out fees.
Therefore, we have taken the decision to remove all CrowdProperty ISA transfer out fees as of this morning. Moving forward, there will be absolutely no fees associated with the CrowdProperty ISA.
We listen to, and very much value your feedback. We hope you appreciate this gesture and will continue to provide us with comments that help us improve CrowdProperty for all, it is much appreciated.
If you have any other questions please get in touch.
Best,
The CrowdProperty Team
|
|
littleoldlady
Member of DD Central
Running down all platforms due to age
Posts: 3,007
Likes: 1,829
|
Post by littleoldlady on Mar 11, 2019 22:04:46 GMT
Therefore, we have taken the decision to remove all CrowdProperty ISA transfer out fees as of this morning. Moving forward, there will be absolutely no fees associated with the CrowdProperty ISA. Best, The CrowdProperty Team Very wise. If you have confidence in your offering you should not be unduly worried about people withdrawing money, but a transfer out fee puts lenders investing in the first place.
|
|
Ukmikk
Member of DD Central
Posts: 445
Likes: 298
|
Post by Ukmikk on Mar 12, 2019 9:25:42 GMT
@crowdproperty Representative, thank you for your reply and explanation of your rationale, which does make a lot of sense, thanks. Also, great news regarding your fees which I find very encouraging and I'm sure will be a popular move. Best regards.
|
|
|
Post by gravitykillz on Apr 19, 2019 18:36:12 GMT
I am interested in investing with cp based on the positive Feedback on this forum. So basically crowdproperty investments are 1 to 2 year Bonds at Low ltv at between 7 to 8% Interest.
|
|
|
Post by Ace on Apr 19, 2019 21:09:07 GMT
I am interested in investing with cp based on the positive Feedback on this forum. So basically crowdproperty investments are 1 to 2 year Bonds at Low ltv at between 7 to 8% Interest. I'm no expert, but my layperson understanding is that they are not technically bonds, as lenders are first charge secured creditors. Whereas bondholders would normally rank behind secured creditors in case of default. The loans I've seen so far range between 10 and 18 months. Yes, rates are currently between 7 and 8%, usually payable on maturity. Though most loans are currently at 8%, my gut feel is that the average rate will drift lower over time due to current oversubscription by lenders (CP have argued against this, but I still feel it's inevitable). I'm very happy with the platform so far, particularly their willingness to listen and react to feedback. Their loans have a good record so far, but it's still early days. I like the new auto-invest feature as it's tricky for me to be online at exactly 10:00 on release days. You're technically forced to spread your auto-invest funds over at least 5 loans, but, in practice, this is likely to be spread over about 20 loans, as the platform is becoming very popular, so your desired loan amount is likely to be scaled back. This is likely to introduce a fair amount of cash drag, so you won't achieve the headline rate.
|
|
|
Post by gravitykillz on Apr 19, 2019 22:22:41 GMT
Thanks for the feedback ace.
|
|
littleoldlady
Member of DD Central
Running down all platforms due to age
Posts: 3,007
Likes: 1,829
|
Post by littleoldlady on Apr 20, 2019 7:56:38 GMT
I am interested in investing with cp based on the positive Feedback on this forum. So basically crowdproperty investments are 1 to 2 year Bonds at Low ltv at between 7 to 8% Interest. I agree with all that Ace says. I have been an early adopter on several platforms and made good returns for a year or two then bailed out at the first signs of trouble. This strategy has worked well for me on Lendy and Collateral, and fairly well on MT, but I was too slow to exit on FS. Continuing to follow the idea I am in a few young platforms such as CP, PC, LP and CR. Adopt this strategy at your own risk. I doubt that there is any strategy that will eliminate all risk in an essentially risky type of investment but still maybe a good idea to follow the 3 golden rules: diversify, diversify, diversify.
|
|
|
Post by CrowdProperty Representative on Apr 20, 2019 9:55:31 GMT
Hi all
As always, many thanks for your comments. To pick up on a few of your points, below is a bit more explanation.
First and foremost, all our loans are first charge secured, ie the same security and rights that a mortgage company has over a home with a mortgage on it. First-charge ranking of security in property is critically important as that gives total control should things go wrong. We have exercised our first charge security once (although the team has many experiences of this), with ample recovery to repay lenders on that project their capital and interest. We have a 100% payback track record of capital and interest and maintaining that by always acting in the best interests of our lenders and only offering first charge secured loans is our number one priority.
Secondly, our average LTVs are as follows:
- Average initial release to initial market value: 60.2%
- Average total loan to GDV excluding rolled up interest: 51.9%
- Average total loan to GDV including rolled up interest: 58.3%
Furthermore, a reduction in rates is not inevitable. If it happens it is purely borrower-side market driven and will affect all platforms and all lenders in the sector. Unlike many platforms, we are very transparent about our statistics, performance and returns (and were recognised for this in the Altfi awards this year, awarded the runner-up in the whole p2p sector for clarity of data). On our statistics page (www.crowdproperty.com/statistics) you’ll see contracted and actual borrower rates and contracted and actual lender rates. This is not just because we love data, it’s because such transparency is vital in this sector. Understanding the difference (or spread) between borrower and lender rates is very important to understanding the risk profile for the returns you are getting. The clarity we provide should be reassuring – there is a tight spread and it is consistent, proving that it is the market on the borrower side rather than us ‘managing’ demand on the lender side that drives any rate differential. This has been externally validated too, with every loan cash flow interrogated and analysed by Brismo (www.brismo.com/market-data/) to provide a truly comparable set of returns vs others that also choose to be independently verified. We wish that others were so transparent in all these ways too as it would reveal a lot and allow for lenders who like to understand great detail, such as many on this forum, to make better informed decisions.
We’re working relentlessly hard to solve for a) high quality lending with consistent tight criteria, b) a positioning as a lender of first resort with borrowers to attract more high quality lending applications, c) ensuring competitiveness in rates on the borrower side (we don’t need to be the absolute cheapest given our knowledge of what’s most important on the service side of things but we need to maintain competitiveness) to close high quality lending applications, d) working hard on sufficient supply of lending opportunities onto our platform never compromising on the above, and e) keeping up with all the great feedback from this forum and our other customers - we love to listen and act.
Our applications for loans are at record levels and we are setting lending records each month at the moment, so we are delivering on our word to bring you more, but as we always say, we will only list a project that meets our tough standards. We are building a sustainable platform for the long-term for the good of all our customers.
To come back to the specific point, rates are not therefore adjusted based on popularity on the lending side – they are solely driven by the market on the borrower side to bring you the best lending opportunities.
As always, we really appreciate your feedback and have a great holiday weekend.
Best regards,
Mike Bristow
CEO & Co-Founder
|
|