|
|
Post by bernythedolt on Jan 30, 2020 22:22:43 GMT
I find it interesting that the rate on the 5yr market has fallen steadily ever since 3rd October 2019 when RS introduced their new system, Access/Plus/Max, with their pre-ordained rates. But the nature of the fall is even more interesting.
Having analysed the published data, the decline has been markedly linear* throughout that entire four month period, losing a steady 0.1% every 12 days. This leads me to suspect IMHO that RS has been systematically manipulating the rate steadily downwards, rather than simple market forces at work.
I'm not financially clued up enough to know why they'd do that, other than to eventually meet up with the Max rate at 4%. Thoughts welcomed!
* For those interested, I found the best-fit linear relationship: rate r = 5.453 - 0.0082n ,where n = days elapsed since 3/10/19. The linear fit is highly convincing, with an R-squared value of 0.9873.
|
|
|
|
Post by bernythedolt on Jan 30, 2020 22:53:56 GMT
To be balanced about this, the period 1/4/19 to 5/5/19 also showed a similar tendency (R-squared 0.9781), but (1) it was far shorter lived (only one third the duration), (2) it matched a similar decline in the 1yr market at the same time, (3) the rates may or may not have been manipulated at that time.
I add (3) only because nowhere else has this behaviour, this particular linear pattern of declining rate, been exhibited throughout the history of RS.
The pattern is odd and I struggle to explain why.
|
|
jlend
Member of DD Central
Posts: 1,817
Likes: 1,444
|
Post by jlend on Jan 31, 2020 7:49:54 GMT
RS are simply putting less new loans through the 5 year market so they can close it in the future.
Else they will end up with 5 markets for ever.
It will take time for the MR on the 5 year to be lower than the the GR on Access/Plus/Max but they are getting there slowly.
|
|
robski
Member of DD Central
Posts: 772 
Likes: 462
|
Post by robski on Jan 31, 2020 13:31:30 GMT
Wanted to reply to this. This is my preferred market, but in effect its been off limits to me since the launch of the new products, the rate was too low and constantly falling. What has happened however is that the MR lump as worked its way ever lower. Its been slowly whittled down however, and as such you have to assume all lending is at that rate, or probably just below. This is as per our expectations when they moved to that calculation, if there is an excess of funds it will slowly force the rate down, it happened around ISA season as well. BUT, the MR lump is almost gone now.There is only £150k (down from about £400k this morning), so its possible for the first time for a long time, you will match at above MR in 5 year today/this weekend. There are fairly decent chunks at 5% and 5.5%, but then its up to 5.8% for the next one. So I think you have seen some rebalancing on the markets, some people who must be mainly hands off and non active as such have allowed MR to fall. You will probably see another firming up of the MT lump next week at the start of the month. But 5 year is only a few decent size loans away from a healthy recovery in rates. With low funds available for lending elsewhere platform liquidity is certainly lower than I can remember. There is going to be definate opportunites for good rates if you keep an eye on whats going on. MR will take a fair while to recover even if we get spiky rates. Its going to function for more like Maxx etc, where there is daily a lump of GR money that keeps pushing the rates down, then if enough lending takes places, its removed and sensible  rates can resume |
|
|
|
Post by gravitykillz on Jan 31, 2020 14:22:32 GMT
Got 6.5% on max a couple of days ago. There are rare spikes. Trick is to jump on them as soon as they are available.
|
|
|
|
Post by bernythedolt on Jan 31, 2020 16:00:34 GMT
Wanted to reply to this. This is my preferred market, but in effect its been off limits to me since the launch of the new products, the rate was too low and constantly falling. What has happened however is that the MR lump as worked its way ever lower. Its been slowly whittled down however, and as such you have to assume all lending is at that rate, or probably just below. This is as per our expectations when they moved to that calculation, if there is an excess of funds it will slowly force the rate down, it happened around ISA season as well. BUT, the MR lump is almost gone now.There is only £150k (down from about £400k this morning), so its possible for the first time for a long time, you will match at above MR in 5 year today/this weekend. There are fairly decent chunks at 5% and 5.5%, but then its up to 5.8% for the next one. So I think you have seen some rebalancing on the markets, some people who must be mainly hands off and non active as such have allowed MR to fall. […] All sounds plausible, thanks (… and more generous to RS than my theory!). If excess funds result in gradual rate decay as you say, it doesn't seem unreasonable to imagine that decay being linear, as we've seen.
|
|
ashtondav
Member of DD Central
Posts: 1,805
Likes: 1,087
|
Post by ashtondav on Jan 31, 2020 18:44:30 GMT
Got 6.5% on max a couple of days ago. There are rare spikes. Trick is to jump on them as soon as they are available. So why didn't i get matched on 5 year at 6%?
|
|
|
|
Post by Deleted on Jan 31, 2020 19:34:22 GMT
Got 6.5% on max a couple of days ago. There are rare spikes. Trick is to jump on them as soon as they are available. So why didn't i get matched on 5 year at 6%? Because they're completely different markets.
|
|
robski
Member of DD Central
Posts: 772
Likes: 462
|
Post by robski on Feb 3, 2020 9:32:00 GMT
Made it to 5.2% by my reckoning
Still some way to go, but feels like the liquidty issue in access has been "fixed" by allowing 5 year to function again (either by investors or RS, or both)
|
|
|
|
Post by propman on Feb 3, 2020 11:31:53 GMT
Made it to 5.2% by my reckoning Still some way to go, but feels like the liquidty issue in access has been "fixed" by allowing 5 year to function again (either by investors or RS, or both) Agreed, was surprised they waited so long. 5.2% offer now available for those interested (still below my minimum!)
I was assuming that they were only allowing sales to go through this market. Still could be the case witrh just a surfeit of those realising better rates are available elsewhere (or were!).
|
|
|
|
Post by bernythedolt on Feb 4, 2020 4:03:15 GMT
Made it to 5.2% by my reckoning Still some way to go, but feels like the liquidty issue in access has been "fixed" by allowing 5 year to function again (either by investors or RS, or both) Oddly, although we could see rates of that magnitude up for grabs yesterday, RS still recorded a figure of 4.5% for the day. Perhaps that was their average figure over the 24 hours, or perhaps they are not recording accurately? Either way, the rate shown on their "rate trends" graph still slopes downwards, as it has for the past five months. I'm slowly beginning to distrust it... Never has it lagged below the 1yr market rate for so long, in the history of RS.
|
|
jlend
Member of DD Central
Posts: 1,817
Likes: 1,444
|
Post by jlend on Feb 4, 2020 7:32:10 GMT
Made it to 5.2% by my reckoning Still some way to go, but feels like the liquidty issue in access has been "fixed" by allowing 5 year to function again (either by investors or RS, or both) Oddly, although we could see rates of that magnitude up for grabs yesterday, RS still recorded a figure of 4.5% for the day. Perhaps that was their average figure over the 24 hours, or perhaps they are not recording accurately? Either way, the rate shown on their "rate trends" graph still slopes downwards, as it has for the past five months. I'm slowly beginning to distrust it... Never has it lagged below the 1yr market rate for so long, in the history of RS. What you see on the graph for the 5 year market is the weighted average rate over the previous 28 days. A daily spike in rates is unlikely to make any difference.
|
|
robski
Member of DD Central
Posts: 772
Likes: 462
|
Post by robski on Feb 4, 2020 8:52:18 GMT
Yep as jlend says, the change to the averaging is what your seeing.
By my rekoning around £4-5M was lent around 4.5%. With the amount that was lent at 5% and now above I think by he weekend if not sooner we would see a rate uptick, assuming we see reasonably steady lending as we seem to have for almost a week now.
remember if £5M is lent at 4.5% your going to need £1M at 5% to get a 0.1% uptick.
There was also constantly money lent at 4.4% by people undercutting the 4.5%. This was the beauty of the RS plan, if enough is listed at MR then people will undercut, this will slowly drag the MR down, which is exactly the behaviour we have seen
|
|
|
|
Post by propman on Feb 4, 2020 10:16:35 GMT
I can see a .1% uptick for yesterday now, currently showing about the same in offers as available up to 5.6%! Has anyone been following what has happened since the bulk of the Monday repayments were creditted to reduce the rate on Max to GR or below?
|
|
robski
Member of DD Central
Posts: 772
Likes: 462
|
Post by robski on Feb 4, 2020 11:16:04 GMT
I can see a .1% uptick for yesterday now, currently showing about the same in offers as available up to 5.6%! Has anyone been following what has happened since the bulk of the Monday repayments were creditted to reduce the rate on Max to GR or below? Was hard to follow, it seemed the Max etc were processed really quickly in comparison to the old markets. About £2.5M was added yesterday to GR and another £0.5M today. Very roughly. I would expect it to take most of this week to eliminate that GR lump, although you never can tell with lending. The 5 year seems to be active again, and has pretty much dealt with the MR lump from the start of the month without it practically even showing. I think 5 year will hit 5.8% today, and could even get into 6%. Likely to take a little while to deal with 6%. Again lending volume dependent. You definately need to be aware of the markets now, cant just stick to one if you want to reinvest and avoid large cash drag.
|
|
rates can resume