p2pfan
Member of DD Central
Full-Time Investor
Posts: 739 
Likes: 830
|
Post by p2pfan on Aug 20, 2022 23:35:11 GMT
All we've heard for years and years from many P2P borrowers and their buddies on P2P platforms is one excuse after another why they can't/won't pay back lenders what they have borrowed. Loans are very regularly extended beyond their stated terms. Even when money has been lent at, say, 70% LTV, lenders have often ended-up not getting all their loaned capital back. Many P2P platforms have gone to the wall, leaving lenders losing all or most of what they loaned.
That's all been while property prices have been going through the roof with record increases, mortgage interest rates have been the lowest in the whole of recorded human history, there has been a stamp duty holiday, and taxes on businesses have been relatively low etc. etc.
With the economy set to tank, the cost of living crisis, corporation tax to spiral from 19% to 25%, the end to the Help to Buy scheme on 31 March 2023, an even more hostile anti-landlord stance from both major political parties, and property prices set to fall over the coming years, is there a risk that the ratio of property-backed loans we lend to will suffer an increase in outright defaults or lenders not getting back all their due money?
When properties are sold to redeem lenders, while there be sufficient realisations to pay us the borrowed sums?
What do you think the next few years may be like with P2P lending we do which is backed by land or property as security?
|
|
ozboy
Member of DD Central
Mine's a Large One! (Snigger, snigger .......)
Posts: 3,156 
Likes: 4,830
|
Post by ozboy on Aug 21, 2022 11:42:22 GMT
Carnage. Get out NOW, asap. I started exiting from P2P years ago and haven't invested since, the illiquidity is the killer. It's Funds for me nowadays, with gold as a hedge, which has turned out V well. And to answer the inevitable question  I still come on here because I have losses with Moneything, Collateral, FundingSecure, and ABLrate. Just call me Lucky ...........  |
|
ashtondav
Member of DD Central
Posts: 1,805
Likes: 1,087
|
Post by ashtondav on Aug 21, 2022 17:45:53 GMT
Rest assured, if there is a recession your shares will decline several degrees worse than p2p. Assuming of course you aren’t in barking dogs like FS etc. A normal recession only affects the margin. Currently 4% unemployment. Bad recession 10% unemployment. 90% of punters unaffected.
|
|
ozboy
Member of DD Central
Mine's a Large One! (Snigger, snigger .......)
Posts: 3,156
Likes: 4,830
|
Post by ozboy on Aug 21, 2022 18:19:47 GMT
I have two words for you @ashtondave ......... Platform Defaults.  |
|
|
|
Post by df on Aug 21, 2022 18:52:09 GMT
All we've heard for years and years from many P2P borrowers and their buddies on P2P platforms is one excuse after another why they can't/won't pay back lenders what they have borrowed. Loans are very regularly extended beyond their stated terms. Even when money has been lent at, say, 70% LTV, lenders have often ended-up not getting all their loaned capital back. Many P2P platforms have gone to the wall, leaving lenders losing all or most of what they loaned. That's all been while property prices have been going through the roof with record increases, mortgage interest rates have been the lowest in the whole of recorded human history, there has been a stamp duty holiday, and taxes on businesses have been relatively low etc. etc. With the economy set to tank, the cost of living crisis, corporation tax to spiral from 19% to 25%, the end to the Help to Buy scheme on 31 March 2023, an even more hostile anti-landlord stance from both major political parties, and property prices set to fall over the coming years, is there a risk that the ratio of property-backed loans we lend to will suffer an increase in outright defaults or lenders not getting back all their due money? When properties are sold to redeem lenders, while there be sufficient realisations to pay us the borrowed sums? What do you think the next few years may be like with P2P lending we do which is backed by land or property as security? I share this concern. Due to rapidly increasing living costs and increasing interest rates mortgages will become unaffordable for most and the house prices will have to come down or the housing market will be stuck. I might be wrong, but that's my thought. Consequently the security on our property loans can drop in value.
|
|
ozboy
Member of DD Central
Mine's a Large One! (Snigger, snigger .......)
Posts: 3,156
Likes: 4,830
|
Post by ozboy on Aug 21, 2022 19:10:29 GMT
"Consequently the security on our property loans can drop in value."And, of course, the Professional Valuation has to be half reasonably accurate in the first place. I (we all?) know the answer to that one if it's a "RICS Professional Valuer" involved .............. 
|
|
|
|
Post by df on Aug 21, 2022 19:53:15 GMT
"Consequently the security on our property loans can drop in value."And, of course, the Professional Valuation has to be half reasonably accurate in the first place. I (we all?) know the answer to that one if it's a "RICS Professional Valuer" involved .............. Of course we do - the value of RICS professional valuation is hardly valuable In my personal property loan book experience, not all, but most were overvalued, some massively overvalued. Then the legion of third parties comes in with their hefty fees to take as much as they can from recoveries... I've no idea what the first BDO distribution will be (I'm not very hopeful), but I know that whatever might come will go straight to one of my savings accounts. Not increasing any of my current positions in p2p platforms.
|
|
ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 10,848
Likes: 11,077
|
Post by ilmoro on Aug 21, 2022 21:00:49 GMT
"Consequently the security on our property loans can drop in value."And, of course, the Professional Valuation has to be half reasonably accurate in the first place. I (we all?) know the answer to that one if it's a "RICS Professional Valuer" involved .............. Of course we do - the value of RICS professional valuation is hardly valuable In my personal property loan book experience, not all, but most were overvalued, some massively overvalued. Then the legion of third parties comes in with their hefty fees to take as much as they can from recoveries... I've no idea what the first BDO distribution will be (I'm not very hopeful), but I know that whatever might come will go straight to one of my savings accounts. Not increasing any of my current positions in p2p platforms. I suspect if you analysed the full loanbooks across multiple platforms the majority of valuations when considered in the context they were written would hold up ... that is not in a distressed sale or unconsidered circumstances ie failing to comply with fire regulations , a situation for which RICS does not provide valuations. (They certainly dont factor in insolvency costs) The issue is one of ensuring understanding & education of lenders by platforms. (Thats not to deny there are some shocking errors as well) Looking at Collateral in particular, the majority of property loans have recovered sums in excess of the loan, those that havent have some undermining issue, the majority being incomplete development loans where the RICS valuation is dependent on the scheme being completed so inevitably a distressed sale of an incomplete scheme has not met the valuation that does not cover that scenario. The chattels loans would appear to be a whole different ball game and will make the property recoveries shining beacons of light in comparison.
|
|
liso
Member of DD Central
Posts: 389
Likes: 394
|
Post by liso on Aug 23, 2022 17:57:46 GMT
|
|
qlassa
Member of DD Central
Posts: 57
Likes: 25
|
Post by qlassa on Aug 29, 2022 14:02:30 GMT
Don't think the return has been adjusted for the higher risk now, and on a relative basis, the saving rates have gone up significantly
|
|
benaj
Member of DD Central
Posts: 4,857
Likes: 1,591
|
Post by benaj on Aug 30, 2022 23:39:32 GMT
the illiquidity is the killer Agreed. I had a number of loans / investment are “late” and haven’t seen repayments for very long time. It’s even worse when the administrator / management can take fees without seeing anything in return. Call that “illiquidity” if you like, but no platforms will want to tell us the stats about them.
|
|
jryan
Posts: 11
Likes: 12
|
Post by jryan on Sept 7, 2022 4:27:07 GMT
All we've heard for years and years from many P2P borrowers and their buddies on P2P platforms is one excuse after another why they can't/won't pay back lenders what they have borrowed. Loans are very regularly extended beyond their stated terms. Even when money has been lent at, say, 70% LTV, lenders have often ended-up not getting all their loaned capital back. Many P2P platforms have gone to the wall, leaving lenders losing all or most of what they loaned. That's all been while property prices have been going through the roof with record increases, mortgage interest rates have been the lowest in the whole of recorded human history, there has been a stamp duty holiday, and taxes on businesses have been relatively low etc. etc. With the economy set to tank, the cost of living crisis, corporation tax to spiral from 19% to 25%, the end to the Help to Buy scheme on 31 March 2023, an even more hostile anti-landlord stance from both major political parties, and property prices set to fall over the coming years, is there a risk that the ratio of property-backed loans we lend to will suffer an increase in outright defaults or lenders not getting back all their due money? When properties are sold to redeem lenders, while there be sufficient realisations to pay us the borrowed sums? What do you think the next few years may be like with P2P lending we do which is backed by land or property as security? I think it's going to be complete carnage in the coming year. I'm currently in New Zealand and the property market is already down 10% and continues to fall further. I suspect we are facing at least 20% and maybe more after you inflation adjust it over the course of the next two years. This must have a major flow on effect in P2P and I think NZ is actually the canary in the coal mine for property markets around the world...economists are watching us closely!
|
|
|
|
Post by overthehill on Sept 7, 2022 10:53:25 GMT
The economic conditions and predictions change nothing with P2P or other investing. If investing was that simple like selling your shares at every peak and buying them at every trough then there would be a billion billionaires in the world.
I've been slowly reducing my P2P investments but survival is more about diversification, type of security and lending, LTV, risk/return ratio, geographical locations, P2P company performance, trust and charges rather than put it all under the mattress. 7% with inflation at 10% is still better than 3%. Also been reducing because the P2P lending rates haven't even started to factor in the risk over the next 2 years when most the loans will need to be repaid. I put this down to out of sight, out of mind autolend and the P2P companies gladly accepting it. How many in the UK still have deposits earning 0.1% ?
|
|
I still come on here because I have losses with Moneything, Collateral, FundingSecure, and ABLrate.
