Mousey
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Post by Mousey on Aug 21, 2020 13:23:15 GMT
So no answers to my questions, then? Hmmmnnn.... Would like to query this bit though - do AC not already do this via the MLA account? Side note: I also invest with BridgeCrowd and whilst I am entirely happy with BridgeCrowd, I would point out to anyone reading who are unfamiliar with BC that: a) BC do not offer an 'Access'-style account, or anything like it b) BC are not true P2P (not A36H compliant) and therefore losses (when they come) cannot be offset against gains. So no answers to my response, then? Hmmmnnn.... ignore this line - I got confused!
Side note: The "uninvested cash" held within the Access Accounts is not 36H compliment either.
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iRobot
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Post by iRobot on Aug 21, 2020 13:26:40 GMT
So no answers to my questions, then? Hmmmnnn.... Would like to query this bit though - do AC not already do this via the MLA account? Side note: I also invest with BridgeCrowd and whilst I am entirely happy with BridgeCrowd, I would point out to anyone reading who are unfamiliar with BC that: a) BC do not offer an 'Access'-style account, or anything like it b) BC are not true P2P (not A36H compliant) and therefore losses (when they come) cannot be offset against gains. So no answers to my response, then? Hmmmnnn....
Side note: The "uninvested cash" held within the Access Accounts is not 36H compliment either.
Sorry Mousey, which response?
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ilmoro
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Post by ilmoro on Aug 21, 2020 13:31:02 GMT
All I will say is I’ve invested a significant amount in a competitor of AC which has never lost a penny of investors Money. Personally I won’t invest in anything higher than 50% LTV with interest rate of < 8%. With at least £200k of equity in the property (to cover admin fees if necessary). My average return is 9.4% ave LTV 41% minimum investment £5k per loan. Over the past 4 months - Every penny I’ve managed to get out of AC has gone there plus. Presumably- AC could replicate that model. Maybe if AC charged borrowers additional interest for additional tranches and offered me & you a better return I / We would have not withdrawn everything from AC. If money is so cheap for borrowers to get elsewhere let then get it from there, and give investors back their redeemed capital. If it’s not; charge the going rate. And before you say agreements are in place - Investors didn’t sign up to open ended funding for ever. Also AC appear to be happy to throw out the terms for lenders but fail to charge the new ‘Norm’ market rate for borrowing. As a retail product AC has trapped investors in over the past 5 months. If they are to survive long term they need to start enticing investors in. This competitor is a regulated P2P platform I assume? I ask because the obvious one with a £5k min isn't so missing some useful stuff like loss relief, FOS access. Obviously AC couldn't replicate that bit.
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iRobot
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Post by iRobot on Aug 21, 2020 13:33:41 GMT
Side note: I also invest with BridgeCrowd and whilst I am entirely happy with BridgeCrowd, I would point out to anyone reading who are unfamiliar with BC that: a) BC do not offer an 'Access'-style account, or anything like it b) BC are not true P2P (not A36H compliant) and therefore losses (when they come) cannot be offset against gains.
Side note: The "uninvested cash" held within the Access Accounts is not 36H compliment either.
Is it possible to suffer a loss against "univested cash"?
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Mousey
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Post by Mousey on Aug 21, 2020 13:48:24 GMT
Side note: The "uninvested cash" held within the Access Accounts is not 36H compliment either.
Is it possible to suffer a loss against "univested cash"? Yes - loss of enjoyment!
In any event the prospect of a loss does not factor into article 36h. 36h I will add for completeness is the only permission that Assetz are regulated for.
And potential further losses if new contracts are entered into or assigned to me by the agent on my behalf without instruction.
And apologies iRobot I got confused re 'which response'
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Post by stuartassetzcapital on Aug 21, 2020 13:52:03 GMT
My only observation is that without higher interest rates to lenders you won’t attract investors and therefore won’t address liquidity issues, which attracts bad publicity that further puts off investors - a doom loop. Higher interest rates for investors say 8% for 180days ( Needs to be matched to new loans) attracts new investors, increased liquidity satisfied investors - a virtuous circle! BridgeCrowd manage it ! Brand new loans? No tranches on existing loans? First, wouldn't an issue be that on day one there would possibly be just one or two brand new loans. Would new investors be happy to have such low levels of diversification? The hope would be that further loans are added and the pot rebalanced so that greater diversity was afforded, but hope isn't a great basis for an investment decision and it could take several months, even years to get a basket of bran new loans in sufficient numbers to make the diversification equation palatable. Second, re: this part - if the new money coming in were going solely to the new '180DAA', how would that improve liquidity across all Access Accounts? Can you expand on this, please, 'cos I don't see it. As an aside, if I were to see a 180-day product with limited diversification, offering well above average rates of return (which 8% would be in the current climate for this type of account) I'd be thinking 'Lendy Wealth MkII'  (Sincere apologies for swearing on the AC board.) "how would that improve liquidity across all Access Accounts" - because people can invest new money into any Access Account account at present and it buys at best discount through the QAA and gives liquidity.
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ian
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Post by ian on Aug 21, 2020 14:00:20 GMT
All I will say is I’ve invested a significant amount in a competitor of AC which has never lost a penny of investors Money. Personally I won’t invest in anything higher than 50% LTV with interest rate of < 8%. With at least £200k of equity in the property (to cover admin fees if necessary). My average return is 9.4% ave LTV 41% minimum investment £5k per loan. Over the past 4 months - Every penny I’ve managed to get out of AC has gone there plus. Presumably- AC could replicate that model. Maybe if AC charged borrowers additional interest for additional tranches and offered me & you a better return I / We would have not withdrawn everything from AC. If money is so cheap for borrowers to get elsewhere let then get it from there, and give investors back their redeemed capital. If it’s not; charge the going rate. And before you say agreements are in place - Investors didn’t sign up to open ended funding for ever. Also AC appear to be happy to throw out the terms for lenders but fail to charge the new ‘Norm’ market rate for borrowing. As a retail product AC has trapped investors in over the past 5 months. If they are to survive long term they need to start enticing investors in. This competitor is a regulated P2P platform I assume? I ask because the obvious one with a £5k min isn't so missing some useful stuff like loss relief, FOS access. Obviously AC couldn't replicate that bit. Loss relief isn’t available however they haven’t lost any investors money! Equally their valuations appear to be accurate, unlike a number on AC which we all know of. Irrespective the point is they offer interest ranging from 7.2 to 12% and those numbers can be attained a LTVs (not GDVs) well below 50% on occasions. I’m not arguing a case for one platform over another however there is clearly an income stream there which AC could / should exploit.
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ian
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Post by ian on Aug 21, 2020 14:11:32 GMT
All I will say is I’ve invested a significant amount in a competitor of AC which has never lost a penny of investors Money. Personally I won’t invest in anything higher than 50% LTV with interest rate of < 8%. With at least £200k of equity in the property (to cover admin fees if necessary). My average return is 9.4% ave LTV 41% minimum investment £5k per loan. Over the past 4 months - Every penny I’ve managed to get out of AC has gone there plus. Presumably- AC could replicate that model. Maybe if AC charged borrowers additional interest for additional tranches and offered me & you a better return I / We would have not withdrawn everything from AC. If money is so cheap for borrowers to get elsewhere let then get it from there, and give investors back their redeemed capital. If it’s not; charge the going rate. And before you say agreements are in place - Investors didn’t sign up to open ended funding for ever. Also AC appear to be happy to throw out the terms for lenders but fail to charge the new ‘Norm’ market rate for borrowing. As a retail product AC has trapped investors in over the past 5 months. If they are to survive long term they need to start enticing investors in. The problem with LTV is that the L is fact and the V is at best someone's opinion, and is often pure fiction. Some platforms have never lost any investors money on paper because they keep kicking non-performing loans into the long grass. If someone has an asset with a realistic LTV of <50% I don't know why they have to pay a rate so high that p2p lenders can get >8% share of it. With respect your concept of what is a fair interest rate appears to be skewed by those afforded by AC. There are property bonds out there with debentures over the entire portfolio a company owns offering 15% interest with a loan to net asset value sub 40%. Viewed against those the BC interest rate looks weak. AC offered a product that ‘looked like’ and let’s face it , was used by the majority as a bank account. Whilst all the caveats were there; larger investors probably used it until better investments came along, smaller investors as an alternative to the likes of Marcus. It had a niche until liquidity was withdrawn and investors started looking at the underlying product.
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iRobot
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Post by iRobot on Aug 21, 2020 14:47:40 GMT
My only observation is that without higher interest rates to lenders you won’t attract investors and therefore won’t address liquidity issues, which attracts bad publicity that further puts off investors - a doom loop. Higher interest rates for investors say 8% for 180days ( Needs to be matched to new loans) attracts new investors, increased liquidity satisfied investors - a virtuous circle! BridgeCrowd manage it ! Brand new loans? No tranches on existing loans? <snip>Second, re: this part - if the new money coming in were going solely to the new '180DAA', how would that improve liquidity across all Access Accounts? Can you expand on this, please, 'cos I don't see it. "how would that improve liquidity across all Access Accounts" - because people can invest new money into any Access Account account at present and it buys at best discount through the QAA and gives liquidity. - I'm confused. OK, that's easily done, but ... ian was proposing a new product - 180 days paying 8% and which only invests in new loans. This higher rate of interest is, in his opinion, the only way to attract new money to the platform. If correct, isn't it the case that all new investment would therefore only go into the new product, as, if correct, no-one would want any other flavour of Access Account? So whilst I can readily see that the AAMP gives liquidity, I don't see how the proposed product would. Hence my confusion.
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ian
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Post by ian on Aug 21, 2020 15:04:03 GMT
"how would that improve liquidity across all Access Accounts" - because people can invest new money into any Access Account account at present and it buys at best discount through the QAA and gives liquidity. - I'm confused. OK, that's easily done, but ... ian was proposing a new product - 180 days paying 8% and which only invests in new loans. This higher rate of interest is, in his opinion, the only way to attract new money to the platform. If correct, isn't it the case that all new investment would therefore only go into the new product, as, if correct, no-one would want any other flavour of Access Account? So whilst I can readily see that the AAMP gives liquidity, I don't see how the proposed product would. Hence my confusion. I will fashion a potential answer - It could new loans or new Tranches - in the case of the latter Redeemed funds in the AAs would not need to be diverted to fund additional tranches instead they would be returned to investors. Secondly if the rate is sufficiently attractive; investors might cancel withdrawal requests and divert funds into the new account thus pushing others to the front of the exit queue
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iRobot
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Post by iRobot on Aug 21, 2020 15:10:08 GMT
This competitor is a regulated P2P platform I assume? I ask because the obvious one with a £5k min isn't so missing some useful stuff like loss relief, FOS access. Obviously AC couldn't replicate that bit. Loss relief isn’t available however they haven’t lost any investors money! Equally their valuations appear to be accurate, unlike a number on AC which we all know of. Irrespective the point is they offer interest ranging from 7.2 to 12% and those numbers can be attained a LTVs (not GDVs) well below 50% on occasions. I’m not arguing a case for one platform over another however there is clearly an income stream there which AC could / should exploit. AC does do bridging, and from a (very) quick and dirty, currently has 16 loans which aren't 'defaulted' and have >£200k headroom, with an average LTV of 64.5% and and average interest rate of 7.4% Using the same criteria BC have 23 with an average LTV of 40% and a average interest rate of 8.6% Note that I've not differentiated between residential and commercial and I have excluded 2nd charge loans on BC as I think AC only do 1st charge. (Apologies if this is incorrect - it is a quick'n'dirty... ) If AC pushed harder in this area, would BC suffer? Personally, I like the balance between the two.
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Post by stuartassetzcapital on Aug 21, 2020 15:17:35 GMT
"how would that improve liquidity across all Access Accounts" - because people can invest new money into any Access Account account at present and it buys at best discount through the QAA and gives liquidity. - I'm confused. OK, that's easily done, but ... ian was proposing a new product - 180 days paying 8% and which only invests in new loans. This higher rate of interest is, in his opinion, the only way to attract new money to the platform. If correct, isn't it the case that all new investment would therefore only go into the new product, as, if correct, no-one would want any other flavour of Access Account? So whilst I can readily see that the AAMP gives liquidity, I don't see how the proposed product would. Hence my confusion. I was only talking generally - if it is specifically that proposed 8% / 180 day account and also that account would be the only one doing high rate lending then yes it would attract a lot of capital and stifle the AAMP. But if it was a part of the range of AAs then it would enhance rates overall and enhance AAMP liquidity overall as all the accounts could participate in those loans. Anyway the high volume bridging market for sensible loans and sensible security is operating at considerably lower than 12% rates payable to investors and many people on here have been there before - in the end these things unwind as what could not initially be seen eventually becomes clear. Its important to note that current market conditions are not creating (quality) borrower demand for very high interest rate loans as so much money has been pumped into the market at low rates.
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iRobot
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Post by iRobot on Aug 21, 2020 15:18:08 GMT
stuartassetzcapital - I'm confused. OK, that's easily done, but ... ian was proposing a new product - 180 days paying 8% and which only invests in new loans. This higher rate of interest is, in his opinion, the only way to attract new money to the platform. If correct, isn't it the case that all new investment would therefore only go into the new product, as, if correct, no-one would want any other flavour of Access Account? So whilst I can readily see that the AAMP gives liquidity, I don't see how the proposed product would. Hence my confusion. I will fashion a potential answer - It could new loans or new Tranches - in the case of the latter Redeemed funds in the AAs would not need to be diverted to fund additional tranches instead they would be returned to investors. Secondly if the rate is sufficiently attractive; investors might cancel withdrawal requests and divert funds into the new account thus pushing others to the front of the exit queue Get the new tranches bit - makes sense (albeit strictly speaking not new loans). Don't get this bit - couldn't they only leave QAA (or an other Access account) if there was someone to fill their slot? No new funds would be coming in to those lower interest accounts - otherwise there'd be no need for a higher paying one - and the new 180 day account can't balance the books as the loans in the lower interest accounts aren't eligible for inclusion in that account, as it is only for new loans and tranches.
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ian
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Post by ian on Aug 21, 2020 15:19:49 GMT
Loss relief isn’t available however they haven’t lost any investors money! Equally their valuations appear to be accurate, unlike a number on AC which we all know of. Irrespective the point is they offer interest ranging from 7.2 to 12% and those numbers can be attained a LTVs (not GDVs) well below 50% on occasions. I’m not arguing a case for one platform over another however there is clearly an income stream there which AC could / should exploit. AC does do bridging, and from a (very) quick and dirty, currently has 16 loans which aren't 'defaulted' and have >£200k headroom, with an average LTV of 64.5% and and average interest rate of 7.4% Using the same criteria BC have 23 with an average LTV of 40% and a average interest rate of 8.6% Note that I've not differentiated between residential and commercial and I have excluded 2nd charge loans on BC as I think AC only do 1st charge. (Apologies if this is incorrect - it is a quick'n'dirty... ) If AC pushed harder in this area, would BC suffer? Personally, I like the balance between the two. I bow to your superior knowledge 😀 - I can only go on my own criteria and I I’m probably in 15 of the 23 loans you mention. I wouldn’t take a second charge but have the occasional 2nd tranche when priced @ 10% plus Pa; LTV below 40%. The point I make stands there’s a good market out there. The one thing I would say is the BC valuations are much more robust, the people are much less arrogant and more customer centric however the platform itself IT / Customer interface is  - which I can put up with. They also don’t treat larger investors as second class citizens, as I have felt AC have done for a number of years now.
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ian
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Post by ian on Aug 21, 2020 15:32:02 GMT
I will fashion a potential answer - It could new loans or new Tranches - in the case of the latter Redeemed funds in the AAs would not need to be diverted to fund additional tranches instead they would be returned to investors. Secondly if the rate is sufficiently attractive; investors might cancel withdrawal requests and divert funds into the new account thus pushing others to the front of the exit queue Get the new tranches bit - makes sense (albeit strictly speaking not new loans). Don't get this bit - couldn't they only leave QAA (or an other Access account) if there was someone to fill their slot? No new funds would be coming in to those lower interest accounts - otherwise there'd be no need for a higher paying one - and the new 180 day account can't balance the books as the loans in the lower interest accounts aren't eligible for inclusion in that account, as it is only for new loans and tranches. For Investors who have funds queued to leave access accounts - if They had the option to invest @ 8% 180 days - maybe they would cancel their withdrawal request if They could divert funds to the new account. It’s carrot rather than stick incentivise me to stay voluntarily rather than trap me by not repaying my capital. Borrowers would fund the interest differential. The thing is presently there is a false market. Borrowers need Money so rates should increase however AC have intervened and prevent investors from getting a better return. As regards the provision fund it’s nonsense - they take 1% off our interest rate to put into a provision fund which they keep and may give us back in 3 years time, to soften the default blow. I’d rather have the 1% now! We’re paying 1% now to get the same money back later 🥴
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- which I can put up with.