Greenwood2
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Post by Greenwood2 on Feb 19, 2022 8:47:13 GMT
The trouble is the other platforms with good track records either pay lower rates than Somo or are practically impossible to invest in.
There is a 7.8% loan on Somo currently if you don't mind a 2nd charge 62% LTV. Taking the Zoopla valuation covers the loan amounts OK, I have no funds so can't be tempted!
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Post by overthehill on Nov 30, 2022 17:43:41 GMT
Dear Social Investors, Higher Rates on new loansTo recap: the cost of capital has increased across the UK so, during Q3 we have increased the cost of our loans to borrowers and passed this increased rate rise on to you. This has proved to be a successful strategy for Somo. We have maintained a strong level of business at conservative loan to values and without deviating from our core loan criteria. As an example, a Second Charge loan at 70% loan to value secured over residential property or a buy to let is now offering a rate of return between 9% and 10% per annum* depending on the LTV and loan term. For the remainder of Q4 2022 we anticipate to maintain the increased rate of return for new deals*. *Past performance is not a reliable indicator of future results. Higher rates on loan extensions
Historically, on a loan extension we maintained the original rate of return for the loan extension periods. This worked in a market where borrowing and investor rates were falling as investors received the original rate rather than a lower rate. However, the market has changed and it is no longer justifiable to extend on loans with rates priced in say, 12 months ago. As such, any new loan extensions will be priced at slightly higher than our current investor rates and where applicable are being enhanced even further if there is an increase in the LTV. This means that investors will now enjoy higher rates for loan extensions and should investors wish to opt out of the extension by placing their loan parts on the resale market, the saleability of these extended loans is vastly improved. Thank you for your continued support. |
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dh1
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Post by dh1 on Nov 30, 2022 17:49:49 GMT
Welcome news, I think. If SOMO can do this why can't others - I'm looking at you, AC - do something similar? Doesn't have to be as good but shouldn't involve telling lenders they can't have their money!
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Nov 30, 2022 18:40:29 GMT
Welcome news, I think. If SOMO can do this why can't others - I'm looking at you, AC - do something similar? Doesn't have to be as good but shouldn't involve telling lenders they can't have their money! But AC have done something similar ... the rates on loans have gone up and quite a lot of extensions are at increased rates. The issue AC have is that they cant raised the rates on existing performing loans so that the average rate in the AA accounts doesnt provide any wiggle room. LP had the same issue and have now started writing business with variable rates built into the contracts to allow flexibility. LP also had more headroom in the spread to lift rates in the meantime
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Post by davefoz on Nov 30, 2022 19:24:06 GMT
Welcome news, I think. If SOMO can do this why can't others - I'm looking at you, AC - do something similar? Doesn't have to be as good but shouldn't involve telling lenders they can't have their money! It is however they do need to be a little more aggressive in ensuring borrowers redeem on time or the revised / increased rate is applied immediately. As regards AC why would you choose to invest in them when your familiar with SOMO & Loanpad is beyond me. The one other thing I am also be would hope to see from SOMO, is the requirement for partial capital repayment in order to maintain LTVS where necessary, GIVEN reducing property values.
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Post by multiaccountmanager on Jun 23, 2023 10:49:29 GMT
There are 2 new loans offered at higher rates than usual.
10.56% or 10.8% depending on whether you are a "family" (longstanding) investor).
Also the LTVs are in the 50s %
Edit
It looks s if all new loans are at a higher rate, perhaps a reaction to the 0.5% hike from the BoE
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dh1
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Post by dh1 on Jun 25, 2023 12:07:32 GMT
Interesting. As I write, there is one loan at 12% (yes, you read that right), 2 at 10.8%, one at 9.84% and two also rans at 9%. Interesting, eh?
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michaelc
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Post by michaelc on Jun 27, 2023 12:42:34 GMT
Can get almost 6% on a one year fix with almost cast iron protection (FSCS) from a bank.
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rscal
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Post by rscal on Jun 27, 2023 13:49:41 GMT
Can get almost 6% on a one year fix with almost cast iron protection (FSCS) from a bank. What about it? The thread isn't about what gets FSCS protection. "Good business is where you find it" Now you have 10 seconds to comply...
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michaelc
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Post by michaelc on Jun 27, 2023 18:23:11 GMT
Can get almost 6% on a one year fix with almost cast iron protection (FSCS) from a bank. What about it? The thread isn't about what gets FSCS protection. "Good business is where you find it" Now you have 10 seconds to comply... Right. It was originally about the borrower rates not being published and morphed into chatter about lender rates. I don't see anything wrong with me pointing out just how far safe, bank deposit rates have risen. No way would I risk it unless the gap was much larger.
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p2pfan
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Post by p2pfan on Jun 27, 2023 19:11:33 GMT
Yes, you're right, FSCS-protected bank savings rates are looking increasingly enticing. I take your point in terms of their competitiveness versus low-interest-paying lending peer-to-peer networks.
I'm therefore veering away from peer-to-peer platforms still offering a miserable 6 - 7 - 8% at these times of sky-high inflation, unless they are particularly safe investments e.g. 50% or lower LTV.
Interestingly, I note that the platforms still trying to get away with paying their investors 8% or below for high risk property development loans etc. are themselves getting, say, 12% from borrowers.
However, SoMo have announced further rate rises today and one will be able to readily earn 10%+ p.a.
And, of course, the beauty of SoMo is you usually get paid interest on a monthly basis rather than at the very end of a loan.
Mostly importantly, SoMo are exceptionally skilled and tenacious with getting money back from errant borrowers; by comparison, most other lending platforms are terrible with that despite their utterances, public relations hype and highly deceptive published statistics.
You pays your money and takes your choice.
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Post by Ace on Jun 27, 2023 19:17:25 GMT
What about it? The thread isn't about what gets FSCS protection. "Good business is where you find it" Now you have 10 seconds to comply... Right. It was originally about the borrower rates not being published and morphed into chatter about lender rates. I don't see anything wrong with me pointing out just how far safe, bank deposit rates have risen. No way would I risk it unless the gap was much larger. How large would the gap need to be on a platform that is very profitable (so little risk of folding), has no capital losses in its 9 years of existence, has successfully repaid 99.7% of interest due over that time, and only deals in bridging loans (so no development risk)?
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michaelc
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Post by michaelc on Jun 27, 2023 20:12:55 GMT
Right. It was originally about the borrower rates not being published and morphed into chatter about lender rates. I don't see anything wrong with me pointing out just how far safe, bank deposit rates have risen. No way would I risk it unless the gap was much larger. How large would the gap need to be on a platform that is very profitable (so little risk of folding), has no capital losses in its 9 years of existence, has successfully repaid 99.7% of interest due over that time, and only deals in bridging loans (so no development risk)? I can only tell you that I have lost quite a lot of money due to the collapse and/or fraud of 3 other platforms that were all previously prominently listed on this site. Namely Lendy, Funding Secure, Collateral and to a lesser degree MoneyThing. I've also got a smaller amount of cash locked in Unbolted due to a rogue borrower trying to wriggle out of his obligations on a legal technicality. All these sites had plenty of people on this forum talking up how stable they were. Of course they did - fellow investors didn't want anything to go wrong. MrC who was the admin of these forums told me once in a PM that this place is a "nest of vipers". I had no idea what he meant at the time but I do now. I make no secret of the fact that I have done well from Somo but past is no guarantee of the future. The reasons you list would definitely not make me think the risk of platform failure was anything like good enough and that applies to all social money lending sites where the underlying asset is created by the platform and is not available from any other platform.
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Post by overthehill on Jun 27, 2023 20:16:46 GMT
Right. It was originally about the borrower rates not being published and morphed into chatter about lender rates. I don't see anything wrong with me pointing out just how far safe, bank deposit rates have risen. No way would I risk it unless the gap was much larger. How large would the gap need to be on a platform that is very profitable (so little risk of folding), has no capital losses in its 9 years of existence, has successfully repaid 99.7% of interest due over that time, and only deals in bridging loans (so no development risk)?
I would say an extra 50% interest for the case above + 1st charge + 50% LTV i.e. fscs=6%, p2p=9%.
As an investor it depends if you think of risk/return in absolute or relative terms i.e is fscs=3%, p2p=6% the same or different than fscs=6%, p2p=9% ?
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Post by Ace on Jun 27, 2023 20:22:27 GMT
How large would the gap need to be on a platform that is very profitable (so little risk of folding), has no capital losses in its 9 years of existence, has successfully repaid 99.7% of interest due over that time, and only deals in bridging loans (so no development risk)? I can only tell you that I have lost quite a lot of money due to the collapse and/or fraud of 3 other platforms that were all previously prominently listed on this site. Namely Lendy, Funding Secure, Collateral and to a lesser degree MoneyThing. I've also got a smaller amount of cash locked in Unbolted due to a rogue borrower trying to wriggle out of his obligations on a legal technicality. All these sites had plenty of people on this forum talking up how stable they were. Of course they did - fellow investors didn't want anything to go wrong. MrC who was the admin of these forums told me once in a PM that this place is a "nest of vipers". I had no idea what he meant at the time but I do now. I make no secret of the fact that I have done well from Somo but past is no guarantee of the future. The reasons you list would definitely not make me think the risk of platform failure was anything like good enough and that applies to all social money lending sites where the underlying asset is created by the platform and is not available from any other platform.I don't understand what you mean by the bit you highlighted in bold. In what way do you consider the asset to be "created by the platform"?
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