nick
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Post by nick on Sept 2, 2015 15:13:13 GMT
I think we are hearing an awful lot from the advanced users of FC who have most to lose but I am not sure where they can switch their funds to - the relative size of FC against other platforms that retain proper bidding means that a mass switch would depress their rates too. My success with FC has been sufficiently poor (no i didn't use autobid) that I can't see how i can lose out so I'm at this point i say 'bring it on' Jack P True, FC is (was) great because of its size. But there are number of alternatives where one can net a higher rate than those proposed by FC and as an individual you can quickly deploy £100k fairly easily.
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Post by transo on Sept 2, 2015 18:41:50 GMT
Yep, I'm with grumpy crowd here; the nice graphs of FC's stats page (which they'll presumably be removing fairly soon) indicated I'm getting a better rate than about 92-95% of the people on FC (depending on exact levels of diversity criminality), and have been enjoying the usual August upswing in lending. Running a quick analysis they've basically taken their rates from the loan-value weighted average rates over the last year. I've pulled together a quick spreadsheet (attached) showing this. (I can't be bothered to do the analysis for D and E as I never bid on these, but feel free to fill it in.)  I think the interesting this is that about 30% of all loans in the last year have an average rate higher than the fixed rate they'd get under the new scheme. I'm sure FC don't expect to suddenly find they don't fill 30% of loans, so they must be assuming a reasonable amount of cash that was being invested in higher rates will get invested at the lower rates. Unfortunately it won't be my cash as none of their rates meet my minima (at least until such time as the government actually makes losses tax deductible rather than just talking about it.) |
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mikeb
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Post by mikeb on Sept 2, 2015 18:43:22 GMT
I wonder if 29% of (current) investors will now opt out (presumably they being the savvy ones). Let's hope the old 80-20 rule doesn't apply here ... If 80% of FC's business comes from 20% of its customers ... (!)
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Steerpike
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Post by Steerpike on Sept 2, 2015 18:48:20 GMT
All platforms tend to Zopa.
Target user for these changes is not the average user on this forum.
It was fun but it was a zero sum game, my gain was some autobidders loss.
Not sure about the next playground, may get a bit more gardening done...
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fasty
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Post by fasty on Sept 2, 2015 21:49:04 GMT
I bet Baz is miffed  |
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Post by yorkshireman on Sept 2, 2015 23:15:29 GMT
I bet Baz is miffed He bought one £20 C loan part off me on the SM on Tuesday. 
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spyrogyra
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Post by spyrogyra on Sept 2, 2015 23:35:08 GMT
If they do not touch the rules around the SM there still might be some field for flipping but not at the current volume. Bots will hoover some loans in minutes and flip hundreds of parts at good premiums when demand is higher than supply. Imho FC deliberately disturbs the market every now and then by implementing new rules or features ( introduction of minimum rates,introduction of new risk bands, introducing property loans, attracting institutional money,different % of cashback, swinging the volume of supply to please borrowers or lenders ). Two-three years ago, as newbie,my first impression was that lenders should expect the unexpected at anytime. Of course, all changes probably are natural as they evolve, but coincidentally such changes always disturb the market. Now flat rates. They must be pretty confident that they'll be able to fulfill all loans if/when flippers retire. And it won't come through ISA money only (some months away), they must have solid assurances that lots of institutional money are ready to be thrown in.
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am
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Post by am on Sept 3, 2015 10:36:58 GMT
What we don't know is if HMRC has had a quiet word about the amount of nontaxable money he's making, bringing about the change a tack. I am not certain that it was non-taxable in his case. Firstly net gains on trading could be treated as capital gains, and he could be above the CGT allowance. Secondly HMRC could deem him to be engaging in trade. (I recall, once upon a time, that active stock market traders' profits could be treated as income rather than capital gains.)
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min
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Post by min on Sept 3, 2015 11:08:00 GMT
Announcement now live on the website: link New fixed rates table: The resulting projected net returns make interesting (!?) reading: Sorry if I've missed this somewhere amongst all of the excellent comments but: If A+ 6-12 month loans are going to have a fixed rate of 6.0%, why would anyone invest in an SME at that rate when property loans for similar lengths of time which are asset backed are available for 8%?
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registerme
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Post by registerme on Sept 3, 2015 11:10:45 GMT
Well, we don't actually know yet how they are going to handle property loans under the new model.
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SteveT
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Post by SteveT on Sept 3, 2015 11:11:33 GMT
Because their reference point is earning 1% in a deposit account and they know no better. Just tick Autobid and leave Failing Chumps to invest your money unwisely.
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TitoPuente
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Post by TitoPuente on Sept 3, 2015 11:25:39 GMT
Because their reference point is earning 1% in a deposit account and they know no better. Just tick Autobid and leave Failing Chumps to invest your money unwisely. They are banking on autobid filling entire loans, but this is to be seen. Autobid seems to get to a saturation point. Who would chip in after? At 6% clearly no one of the 29%. Would they increase the rate? Would they offer CBs? Would they do tranches? Maybe they believe that they will be able to scale up the lending base to a level where Autobid is sufficient to keep the show going. But this is not the case today or next month.
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Post by nightmare on Sept 3, 2015 11:33:28 GMT
I bet Baz is miffed Well they do say that every cloud has a silver lining! Interestingly when I got my phone call on Tuesday I suggested that all the low value loans would be snapped up in minutes by Baz and the other bots, the guy I spoke to said that they would be 'asking them to stop being naughty' (my words not their's).
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adrianc
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Post by adrianc on Sept 3, 2015 12:21:01 GMT
Interestingly when I got my phone call on Tuesday I suggested that all the low value loans would be snapped up in minutes by Baz and the other bots, the guy I spoke to said that they would be 'asking them to stop being naughty' (my words not their's). Will they say "please", d'you think? <rolls eyes>
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am
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Post by am on Sept 3, 2015 14:09:30 GMT
Well they do say that every cloud has a silver lining! Interestingly when I got my phone call on Tuesday I suggested that all the low value loans would be snapped up in minutes by Baz and the other bots, the guy I spoke to said that they would be 'asking them to stop being naughty' (my words not their's). Why would they want to snap up the low value loans? They've been trading on the difference between marginal and market rates - they won't be able to do that anymore. My prediction would be that they would restrict their activities to the property loans, where they can continue to trade on the cashback.
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