fp
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Post by fp on Oct 11, 2016 8:32:09 GMT
It's very entertaining to watch. Not just the fury over the late property loans, but also a real ding dong over the weekend which resulted in the whole thread being removed and some forum members given warnings. A much improved board. Particularly He--, pepperpot, though the 12 months means you can hold it for ten, with your bargepole and with your nose held, and then exit. This also went through my mind last night, then I woke up find i'd wet the bed. I looked at both, one was showing a fairly low LTV, which in no way matched the figures right beside it... no thank you, I've seen enough disdain about property loans in the other place, this is just another typical example.
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metoo
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Post by metoo on Oct 11, 2016 15:02:26 GMT
This also went through my mind last night, then I woke up find i'd wet the bed. I looked at both, one was showing a fairly low LTV, which in no way matched the figures right beside it... no thank you, I've seen enough disdain about property loans in the other place, this is just another typical example. What LTV did you see? I added up the individual valuations for the 14 flats and it matched the figures in the summary box, giving LTGDV 53.7%. Am I missing something there?
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blender
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Post by blender on Oct 11, 2016 15:20:29 GMT
This is a very interesting project. They are refinancing a 10 loan partly-late project and this is the first chunk. It is just closing and I have used it to recycle some other property loans which are getting near the end game. Even at 10% I do not see how they will get this refinance through without either taking some on the balance sheet or offering - fanfare, drum role - cash back. If and when they add the cash back they do not know whether it will go to the trust or not - next tranche I think no cash back. Once the first tranche has filled I assume FC is committed. Golden rule : do not hold the loan down to one payment left.
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fp
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Post by fp on Oct 12, 2016 18:41:40 GMT
This also went through my mind last night, then I woke up find i'd wet the bed. I looked at both, one was showing a fairly low LTV, which in no way matched the figures right beside it... no thank you, I've seen enough disdain about property loans in the other place, this is just another typical example. What LTV did you see? I added up the individual valuations for the 14 flats and it matched the figures in the summary box, giving LTGDV 53.7%. Am I missing something there? I've just been back and had a look at this, it was the He***n loan, development costs are only about 5% different to overall development value, LTV showing as 64%
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metoo
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Post by metoo on Oct 13, 2016 16:19:59 GMT
What LTV did you see? I added up the individual valuations for the 14 flats and it matched the figures in the summary box, giving LTGDV 53.7%. Am I missing something there? I've just been back and had a look at this, it was the He***n loan, development costs are only about 5% different to overall development value, LTV showing as 64% Note that if revised planning on the internal layout gets approved, the GDV goes up to £4,195,000, an extra £305,000. You're right their profits are tight without this, which must be why they're hoping to squeeze in extra rooms. So long as they finish the construction the loans have a fair amount of leeway to get repaid whether they get the planning change or not. The LTV for loans secured against the He**** site is indeed 64% on the existing planning, as per the list of values for each flat, or 59.4% if planning goes through. Actual sales prices, time will tell. At current valuations with the improved planning, the developer makes about half a million profit or 12%. I think they hit delays early on because of issues with the sewerage connection, disputing with the water authority, or something, that's how it goes.
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fp
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Post by fp on Oct 13, 2016 17:28:45 GMT
I've just been back and had a look at this, it was the He***n loan, development costs are only about 5% different to overall development value, LTV showing as 64% Note that if revised planning on the internal layout gets approved, the GDV goes up to £4,195,000, an extra £305,000. You're right their profits are tight without this, which must be why they're hoping to squeeze in extra rooms. So long as they finish the construction the loans have a fair amount of leeway to get repaid whether they get the planning change or not. The LTV for loans secured against the He**** site is indeed 64% on the existing planning, as per the list of values for each flat, or 59.4% if planning goes through. Actual sales prices, time will tell. At current valuations with the improved planning, the developer makes about half a million profit or 12%. I think they hit delays early on because of issues with the sewerage connection, disputing with the water authority, or something, that's how it goes. But this is all hope value is it not? Isn't this a renewal of an already overdue loan too, or did I confuse it with another one? Apologies, I rarely follow FC loans these days, so my knowledge is somewhat sketchy!
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metoo
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Post by metoo on Nov 8, 2016 17:55:19 GMT
For A+ property development loan requests, excluding refinancing loans, does anyone besides me get the impression that there's been an increasing number with lower LTVs? Say in the low 60s compared with the high 60s or low 70s of a couple months ago? It may be my imagination. That's my impression too, and consistent with what marc77 reported was said at this summer's Investor Evening about their shift in policy. Originally LTVs were going to be capped at 70% but the limit seemed to move to 84% over time. It's a shame the loan book doesn't include LTVs, so the only way to track it would be to record them from the loan pages. As you say, the exceptions are refinances of existing projects, notably the B*ll*rds 11% loans at 84% LTV. Last time I looked, I think that property was being marketed at 88.9% LTV with extra incentives available to a buyer, so probably 90%+ LTV in market reality, rather than the valuer's figure. At least H*ndon was refinanced in combination with H**nslow to keep the LTV down. Not sure why people were upset by that. FC must be keen to avoid a first loss on property, and are taking more account of the risk that property prices could fall, whereas before they seemed to be maximising the amount lent.
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metoo
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Post by metoo on Nov 8, 2016 18:25:00 GMT
The 60% figure seems a bit elastic and I think in one of the talks at Lendit recently they said a figure of 70%, so perhaps 60% means 60s. The LTV range on offer does seem to be at lower numbers than before the Brexit vote.
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bigfoot12
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Post by bigfoot12 on Nov 9, 2016 9:24:50 GMT
For A+ property development loan requests, excluding refinancing loans, does anyone besides me get the impression that there's been an increasing number with lower LTVs? Say in the low 60s compared with the high 60s or low 70s of a couple months ago? It may be my imagination. I haven't got recorded every property loan, and I record the headline number from the front page, but it seems to me that the mean LTV is unchanged, but that the variance is reduced as well as the maximum. +------+----------+----------+----------+----------+
| mnth | avg(ltv) | std(ltv) | max(ltv) | quantity |
+------+----------+----------+----------+----------+
| 1 | 68.22222 | 9.36634 | 84.0 | 27 |
| 2 | 65.44231 | 10.32252 | 85.0 | 52 |
| 3 | 63.72093 | 9.24430 | 82.0 | 43 |
| 4 | 62.81967 | 12.01435 | 82.0 | 61 |
| 5 | 58.30000 | 13.42423 | 85.0 | 50 |
| 6 | 57.27027 | 13.50005 | 75.0 | 37 |
| 7 | 61.23333 | 11.67385 | 81.0 | 60 |
| 8 | 62.12727 | 15.00431 | 84.0 | 55 |
| 9 | 61.54545 | 8.41928 | 76.0 | 44 |
| 10 | 60.82143 | 8.63570 | 77.0 | 56 |
| 11 | 62.56250 | 7.07963 | 71.0 | 16 |
+------+----------+----------+----------+----------+
EDIT: Made clear that I haven't recorded the details of every loan, as opposed to not owning every loan. I own a few 10% property loans, but otherwise I haven't bought any since cashback stopped.
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blender
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Post by blender on Nov 9, 2016 10:18:44 GMT
Thanks, bigfoot. This would be consistent with the stress testing they did on the loan book - sensitivity to changes in property values. It might also explain why some loans are taking some time to be refinanced: 'however the process is taking slightly longer than expected'.
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Post by slumberingaccountant on Nov 9, 2016 19:39:05 GMT
Good analysis. Certainly noticed no very high LTVs in last couple of weeks.
However have noticed more property loans being refinanced before they expire; so maybe some of the criticism regarding some of the loans has been read and acted on ?
waiting for some more brand new loans as i would rather invest for 18 months than 6 at 8%. Of course if the 3/4/6 months loans were at 10/11% i would be more interested.
It would seem though that even at these rates they will fill- as some invest at 7.5% or less on unsecured loans. Madness in my opinion, but im only one investor...
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metoo
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Post by metoo on Nov 10, 2016 21:27:28 GMT
I haven't recorded every property loan, and I record the headline number from the front page, but it seems to me that the mean LTV is unchanged, but that the variance is reduced as well as the maximum. ... Thanks for the great data analysis bigfoot12 . Ideally the figures would split out the refinance of existing FC loans from the rest. The LTV generally is goes up on a refinance with new interest added on top of loans lent before Brexit, unless some special factors bring the LTV down. The suggestion is that new projects being accepted are at lower LTVs. That would involve going through each loan page though, checking the Business Profile to see if it is a refinance!
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bigfoot12
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Post by bigfoot12 on Nov 10, 2016 21:50:33 GMT
That would involve going through each loan page though, checking the Business Profile to see if it is a refinance! I can probably send you a list of loan ids and urls by month if you want to go through them all, but I won't be!
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metoo
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Post by metoo on Nov 10, 2016 22:01:13 GMT
That would involve going through each loan page though, checking the Business Profile to see if it is a refinance! I can probably send you a list of loan ids and urls by month if you want to go through them all, but I won't be! If you can PM me a spreadsheet of the data so far including the URLs, I might get round to it, but can't guarantee!  Nice result so far anyway, thanks. In reality, I only look at the attractive loans these days, but I might be interested to see how the numbers stack up. I think my interest is to see how serious FC are about trying to avoid a property default, as I think it may affect sentiment towards FC property loans more generally if a default occurs.
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acky
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Post by acky on Nov 21, 2016 9:58:53 GMT
So they've pulled North Devon 14 after it filled 23% in four and a half days. How they thought they'd get that away at 8% (especially given the problems with other recent tranches) is beyond me. My breath is bated as to how this will come back - 10% or cash back (halving the amount as they did before isn't going to work)? Henley refinance is struggling at 9% as well (on Tranche 1) - that's going to be a very long haul for them without some further improvement in terms.
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