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Post by bernythedolt on Oct 27, 2019 1:38:35 GMT
Strange / dumb money queuing on the new product this morning. 175 orders queing below 0.2% of going rate, totalling £804, that's less than £5 per order, what's going on? Stranger still overnight, by orders of magnitude. At 4.9% on Max right now there are 455 orders totalling a cumulative £30. Seven pence per order!
Unreliable, as others say, but there's presumably a rational explanation ("computers don't make mistakes").
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acronym
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Post by acronym on Oct 27, 2019 13:21:25 GMT
Here's an e-mail I sent to RS today:
It is now a month since I last corresponded. You do not seem to have done anything to allay my fears.
Despite your assurances that existing rate matching facilities would be maintained (now you have deployed your Access/Plus/Max regime) in practice this has effectively not happened.
Navigating your site to access the information needed and to set my own rate has become very difficult and less than intuitive. Subtle changes have made navigation far from straightforward. The real link between lenders and borrowers has been ruptured as Ratesetter wields its influence.
I used to enjoy making decisions on a daily basis as to how I would manage my Ratesetter investments and felt pleased when I felt I had offered money at the "right" rate and it was taken up. All this fun has disappeared. I'm frustrated and disappointed.
You have engineered your model to effectively fix (more or less) the rates you offer. This is what banks do. I don't want a bank.
If you really had to introduce the new model.it should, in my opinion, have been under a distinctive new brand name and not on the coat tails of an established model.
Sadly I will be transferring out my ISA deposits and will be winding down my other investments.
I hope Ratesetter continues to do well - not least because I want it to remain solvent whilst I wind down. But it's no longer the Peer-to-peer provider for me.
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r00lish67
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Post by r00lish67 on Oct 27, 2019 14:29:57 GMT
Here's an e-mail I sent to RS today:
It is now a month since I last corresponded. You do not seem to have done anything to allay my fears.
Despite your assurances that existing rate matching facilities would be maintained (now you have deployed your Access/Plus/Max regime) in practice this has effectively not happened.
Well, they actually said was that for those already in the 1yr/5yr markets, they would continue to be available. Which, to be fair, they have been. Admittedly I don't much love 'new RS' either, and the rates have been absysmal since the change (except a spike or two on 1yr) but the markets are there... P.S - Welcome to the forum!
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Post by nutfield on Oct 27, 2019 14:52:39 GMT
Yes - the new RS is not what it used to be. The rates are set by RS (trades descriptions?). Its a bit like the the Lib Dems who have decided that they know better than the democratic referendum and have decided that if elected they will do the opposite of what was voted for. Anyway the bottom line is that RS have effectively cut their rates by about a whole percent. I am casting around for alternatives.
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Post by propman on Oct 28, 2019 9:12:54 GMT
Not been following much of this, but I notice that since their first inception the GR has been 3%, 4% and 5%. Does this mean RS has achieved their aim of sustainable, predictable rates? For example will we ever see 6% again in max or 5year? Is RS safer because of the lower rates? GR is acknowledged to be set by RS. Is it safer? well the difference in rate goes somewhere other than to investors, so either lower rates are given or RS are taking higher fees/ Pf contributions. The former should give them the opportunity to lend to lower risk borrowers although how much that far from the rates available to genuinely low risk borrowers I don't know. The middle option would reduce platform risk so long as they can continuue to lend (ie have sufficient lenders funds), while the latter would directly increase the security, so broadly it should reduce risk. It is for us to decide whether this is sufficient to maintain the risk/reward ratio...
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robski
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Post by robski on Oct 28, 2019 10:29:27 GMT
Not been following much of this, but I notice that since their first inception the GR has been 3%, 4% and 5%. Does this mean RS has achieved their aim of sustainable, predictable rates? For example will we ever see 6% again in max or 5year? Is RS safer because of the lower rates? GR is acknowledged to be set by RS. Is it safer? well the difference in rate goes somewhere other than to investors, so either lower rates are given or RS are taking higher fees/ Pf contributions. The former should give them the opportunity to lend to lower risk borrowers although how much that far from the rates available to genuinely low risk borrowers I don't know. The middle option would reduce platform risk so long as they can continuue to lend (ie have sufficient lenders funds), while the latter would directly increase the security, so broadly it should reduce risk. It is for us to decide whether this is sufficient to maintain the risk/reward ratio... Yeah I tend to agree, this much change on a scale its happening and I think this should move RS to be profitable. Which you would say has to decrease the platform risk somewhat. Although for me thats only until the underwriting side of the platform suffers some issue. For me the risk always remains how investors will react when a significant even happens, most likely to be a recession, a rise in defaults, and probably an interest haircut. At that point to me, all bets are off. The platform risk could go up, if enough investors decide withdrawing is the only option then rates will go up, potentially a lot. Until the rates with haircut match the risk, or perceived risk. Too little liquid cash could see RS back into loss from higher rates, or not able to write enough loans to keep their share of the fees coming in. Don't forget RS will see income drop from less loans going to term and they rely on lenders lending in order to take their cut. So summary, short term i think platform risk is lowered by this action, but to me it hasn't changed the real risk to the platform and lenders, which is when the inevitable bad event happens. I still think how RS react to that will be the making or breaking of the platform.
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Post by propman on Oct 28, 2019 10:43:51 GMT
To add to what I said above, not only have rates fallen, but so have lending volumes. Not sure whether that is a market issue (Brexit caution?), or a sign of tighter underwriting. I am amazed that there has not been a bulletin if they have tightened the underwriting, surely a huge marketing issue for them. Or are they concerned about worrying existing investors by tacitly admitting that their previous underwriting let through high risk investors (party line has remained low risk good covenant loans).
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r00lish67
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Post by r00lish67 on Oct 28, 2019 11:17:50 GMT
To add to what I said above, not only have rates fallen, but so have lending volumes. Not sure whether that is a market issue (Brexit caution?), or a sign of tighter underwriting. I am amazed that there has not been a bulletin if they have tightened the underwriting, surely a huge marketing issue for them. Or are they concerned about worrying existing investors by tacitly admitting that their previous underwriting let through high risk investors (party line has remained low risk good covenant loans). Why do say lending volumes have fallen? According to their stats, they lent £708m in 2018, and as of 01/10/2019 they've lent £609m. That puts them on track to have lent circa £800m by the end of the year..
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robski
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Post by robski on Oct 28, 2019 11:42:03 GMT
To add to what I said above, not only have rates fallen, but so have lending volumes. Not sure whether that is a market issue (Brexit caution?), or a sign of tighter underwriting. I am amazed that there has not been a bulletin if they have tightened the underwriting, surely a huge marketing issue for them. Or are they concerned about worrying existing investors by tacitly admitting that their previous underwriting let through high risk investors (party line has remained low risk good covenant loans). Why do say lending volumes have fallen? According to their stats, they lent £708m in 2018, and as of 01/10/2019 they've lent £609m. That puts them on track to have lent circa £800m by the end of the year.. If you look at the last 14 months or so, most of the lowest weeks over that period are the last 2-3 months. Only 1 week in the last 4 was over £15M The trend seemed to be up earlier this year (vs prior) but seems well down more recently, could be nothing in it, could be there is just fluctuation and trends don't mean a lot I guess with some large property loans it could very quickly change.
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r00lish67
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Post by r00lish67 on Oct 28, 2019 11:53:15 GMT
Why do say lending volumes have fallen? According to their stats, they lent £708m in 2018, and as of 01/10/2019 they've lent £609m. That puts them on track to have lent circa £800m by the end of the year.. If you look at the last 14 months or so, most of the lowest weeks over that period are the last 2-3 months. Only 1 week in the last 4 was over £15M The trend seemed to be up earlier this year (vs prior) but seems well down more recently, could be nothing in it, could be there is just fluctuation and trends don't mean a lot I guess with some large property loans it could very quickly change. Where is the week-by-week/month-by-month granularity displayed?
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jlend
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Post by jlend on Oct 28, 2019 12:09:42 GMT
If you look at the last 14 months or so, most of the lowest weeks over that period are the last 2-3 months. Only 1 week in the last 4 was over £15M The trend seemed to be up earlier this year (vs prior) but seems well down more recently, could be nothing in it, could be there is just fluctuation and trends don't mean a lot I guess with some large property loans it could very quickly change. Where is the week-by-week/month-by-month granularity displayed? Log on Market Data Rate Trends There is a weekly volume box to tick. Circa 53m last time I looked for Oct so far. A little low for the month but high vs the majority of platforms in the UK. Am not surprised it has dropped a little given the nervousness around p2p in general. Plus RS being careful around liquidity as the new products bed in.
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alender
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Post by alender on Oct 28, 2019 12:12:41 GMT
I think RateSetter should change their name to RateStitcher to properly reflect what they are doing and not fall foul of the advertising standards authority.
For at least 5 years I have seen RS pull all sorts of tricks to reduce rates including at one point buying their own loans from the PF fund (only stopped due to outcry in mainstream press). In the past one of RS’s best is to come out with a special offer if rates start to rise too much, this crashes rates for the next few months. RS have always called it a market, this is a market only in the same sense as a supermarket, RS sets the rates and the lenders can take it or leave it. I have been described as a conspiracy theorist by WestenKevin (when he worked for RS) and some other people on here only to find out that these theories turn out to be fact.
Glad to have left them about 1 ½ years ago.
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robski
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Post by robski on Oct 28, 2019 13:55:37 GMT
Where is the week-by-week/month-by-month granularity displayed? Log on Market Data Rate Trends There is a weekly volume box to tick. Circa 53m last time I looked for Oct so far. A little low for the month but high vs the majority of platforms in the UK. Am not surprised it has dropped a little given the nervousness around p2p in general. Plus RS being careful around liquidity as the new products bed in. Its a good point, we can tend to forget how big RS actually are in comparison to most. We do know that the rates are highly dependent on supply and demand, demand seems quite variable, whilst supply seems quite steady ( I guess for a lot its simply recycling existing cash (+interest) When we have seen high demand we have seen rates go up, and vice versa. ISA season being a great example. RS found a way to force the rates to be what they wanted, whether they can keep them there, well thats a different thing
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jlend
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Post by jlend on Oct 28, 2019 15:07:38 GMT
Log on Market Data Rate Trends There is a weekly volume box to tick. Circa 53m last time I looked for Oct so far. A little low for the month but high vs the majority of platforms in the UK. Am not surprised it has dropped a little given the nervousness around p2p in general. Plus RS being careful around liquidity as the new products bed in. Its a good point, we can tend to forget how big RS actually are in comparison to most. We do know that the rates are highly dependent on supply and demand, demand seems quite variable, whilst supply seems quite steady ( I guess for a lot its simply recycling existing cash (+interest) When we have seen high demand we have seen rates go up, and vice versa. ISA season being a great example. RS found a way to force the rates to be what they wanted, whether they can keep them there, well thats a different thing It will be interesting to watch what happens to the average lender rates 2016 4.3% 2017 4.1% 2018 4.5% 2019 to date 4.6% I am assuming it will stay in the range it has been over the last few years.
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ashtondav
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Post by ashtondav on Oct 28, 2019 16:23:58 GMT
Will I ever get 6% again in max or 5 year? If not do I go increase my exposure to LW (risky) or accept 5% on max.
These are not trivial issues...
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