mikes1531
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Post by mikes1531 on Apr 15, 2015 21:05:25 GMT
That's quite an achievement -- pig mincers that fly!  
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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 Apr 15, 2015 21:07:15 GMT
That's quite an achievement -- a pig mincer that flies! Have to say, I was expecting that response from someone
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mikes1531
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Post by mikes1531 on Apr 15, 2015 23:50:20 GMT
That's quite an achievement -- a pig mincer that flies! Have to say, I was expecting that response from someone I'm glad I was able to oblige! 
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Post by chris on Apr 16, 2015 6:45:39 GMT
Then again, put another way. If this is priced to risk (do AC still do that?) then isn't it a tacit admission that after losses, no investment in AC will make more than 6.5%. In which case, we have to assume that there are many more losses and defaults to come on all the other loans. (Just finding this left field offering truly bizzare) We've always said our pricing model is primarily based on risk but takes into account the market rate where applicable. With a well secured 12% loan you may receive that full 12% but face a year of uncertainty and disruption whilst security is realised. For some people a less risky 6.5% with the type of security and rental income a BTL offers is more attractive. You may hate a provision fund protected 7% return where others are happy with even lower rates if they perceive the risk to also be lower. Others simply like to diversify across multiple asset classes and loan types. This isn't the first BTL we've offered so I don't know why it's being labelled as left field and bizarre, and it won't be the last. If you don't like it don't invest, there'll be other loans that will meet your criteria and it's our job and intention to scale all loan types and asset classes that our lender base are interested in.
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am
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Post by am on Apr 16, 2015 6:45:53 GMT
Then again, put another way. If this is priced to risk (do AC still do that?) then isn't it a tacit admission that after losses, no investment in AC will make more than 6.5%. In which case, we have to assume that there are many more losses and defaults to come on all the other loans. (Just finding this left field offering truly bizzare) Common wisdom is that riskier investments, on average, give a higher net return as well as a higher nominal return.
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bugs4me
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Post by bugs4me on Apr 16, 2015 9:15:56 GMT
This isn't the first BTL we've offered so I don't know why it's being labelled as left field and bizarre, and it won't be the last. If you don't like it don't invest, there'll be other loans that will meet your criteria and it's our job and intention to scale all loan types and asset classes that our lender base are interested in. Fair point - we'll see how things pan out.
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Mike
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Post by Mike on Apr 16, 2015 14:07:15 GMT
Open an HSBC regular saver today and get 6% gross...
True, its a one year regular saver which isn't the same product but the interest rate is still high, and I think I know which is better risk/reward compared to the above mentioned loan. AC struggling to beat bank rates...
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bg
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Post by bg on Apr 16, 2015 14:13:11 GMT
Open an HSBC regular saver today and get 6% gross... True, you can only add £250/month to a maximum of 3k but I think I know which is better risk/reward compared to the above mentioned loan. That probably isn't much use for those that have more than £250 a month (or £3k in total) to invest. Plus i would say opening an account with HSBC is likely to be a load of hassle...certainly a load more hassle than clicking on a loan and setting an investment target.
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Post by chris on Apr 16, 2015 14:34:03 GMT
Open an HSBC regular saver today and get 6% gross... True, its a one year regular saver which isn't the same product but the interest rate is still high, and I think I know which is better risk/reward compared to the above mentioned loan. AC struggling to beat bank rates... Even ignoring the apples and oranges comparison you're comparing the lowest rate we offer with the highest HSBC have on offer and they have caps on how much you can invest.
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Mike
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Post by Mike on Apr 16, 2015 14:34:59 GMT
I agree with you, but the fact is that HSBC are paying 6% on deposits with (I think in most peoples view) much less risk than lending via AC for an extra 0.5% - they're obviously not the same and in both cases there's a limit to how much you can invest, but I still think this is a revealing comparison.
Most people wouldn't invest more than 3k on a single AC loan either so comparing the two individually I think I would take up HSBCs offer before I started pouring money into ACs 6.5% loans.
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Post by chris on Apr 16, 2015 14:36:52 GMT
I would guess closer to 10%, especially at 75%LTV, but that's based on nothing at all. Not knowing how big the incentives offered to the underwriters were/are, we can't judge by the fact that the underwriters stepped forward to do their job -- presuming that they have. So we'll have to wait until the loan appears on the AC availability list next week and see how quickly -- or slowly -- it is taken up by AC's investors. Underwriters get the same fees across all loans, they're taken from the AC fee which is also pretty much standardised across all loans. No special promotions on BTL or any other loan types otherwise they wouldn't make the platform itself any money. I've just had confirmation back from the admin team and can confirm that the rewards offered to the underwriters were actually a fair bit lower on this BTL loan than on our usual SME and development loans. This was discussed with the underwriters before we made a push to find more BTL deals and they've expressed a lot of interest in this sector.
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Post by chris on Apr 16, 2015 14:41:47 GMT
I agree with you, but the fact is that HSBC are paying 6% on deposits with (I think in most peoples view) much less risk than lending via AC for an extra 0.5% - they're obviously not the same and in both cases there's a limit to how much you can invest, but I still think this is a revealing comparison. Most people wouldn't invest more than 3k on a single AC loan either so comparing the two individually I think I would take up HSBCs offer before I started pouring money into ACs 6.5% loans. If rate is the only determining factor in whether to invest or not then RateSetter and Zopa would be out of business in light of savings accounts like this one from HSBC. If you don't like it or the rate is too low then don't invest, simple as. There are lots of people that do like it including our underwriters, and as we broaden our offering you're going to see lower rates than this alongside the higher rate loans.
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Mike
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Post by Mike on Apr 16, 2015 14:48:10 GMT
Thanks Chris I think I probably worked out already that investment in this loan was up to me. If you don't like the forum then don't read the posts, what is a forum anyway?
Just because other people go for a product with low interest doesn't mean its good value to me. Plenty people buy iPhones and I consider them poor value too - yet Apple don't struggle. Presumably people value something about the iPhone that I don't, or else they're just silly Billy's. Hence a forum, for discussion about those differences..
Edit: I should say, apparently, that I'm not complaining about AC - only saying that this loan isn't for me because I don't think the risk-reward ratio is very good.
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bg
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Post by bg on Apr 16, 2015 15:09:40 GMT
I don't think it's a fair comparison at all. To access the HSBC offering you have to have a current account (which is a hassle to set up, transfer salary, direct debits etc). Even then you only get 4% unless you have an Advance or Premier current account (to get a premier account you have to have an income of over £100k or over £50k invested in HSBC).
You can only pay in a maximum of £250 a month into the savings account and at the end of the year it gets transferred into a new savings account paying next to nothing. The most you could earn from doing this is £97. If you invested £3k in the Assetz loan, you would earn £195 in year one and still be earning in year 2.
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Mike
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Post by Mike on Apr 16, 2015 15:21:43 GMT
I don't think it's a fair comparison at all. To access the HSBC offering you have to have a current account (which is a hassle to set up, transfer salary, direct debits etc). Even then you only get 4% unless you have an Advance or Premier current account (to get a premier account you have to have an income of over £100k or over £50k invested in HSBC). You can only pay in a maximum of £250 a month into the savings account and at the end of the year it gets transferred into a new savings account paying next to nothing. The most you could earn from doing this is £97. If you invested £3k in the Assetz loan, you would earn £195 in year one and still be earning in year 2. They aren't the same thing - I'm not claiming they are - but you're also assuming you're able or invest 3k in the AC loan. How about if after a year you've only managed to invest £1000 despite having a 3k target, but transferred the full amount to AC before the loan became live? Its fair to say that you are limited to £250/month with the HSBC product but with the AC offering the limit is unknown - maybe you will get 3k from day one maybe you won't even manage to get 250/month. My point was, and is, that there are products that offer similar interest rates with less risk (but different restrictions). The products aren't the same and the comment I originally made was not really meant to be taken as 'this proves that' but more a reminder that some rates on AC have now become very similar to some standard high street savings rates.
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