The shape of things to come

Well, I would argue that the "market" that is valuing an unsecured loan at 7% level is largely autobodge in basic settings. But autobodge will not buy mark-ups.  

Quite a bit of the public squealing so far has, perhaps not surprisingly, been coming from some of the (smaller) players more reliant on parasite strategies as a % of overall returns; presumably they do not have as many options, e.g. underwriting on other platforms?

The flipper formerly known as B*z (the original one, who I think is now 'the digger') put some stats on the old independent forum suggesting <20% of gross returns came from loan interest. If that was/is your model then it is more of a problem, otherwise it is manageable, particularly if the evidence of your portfolio management to date suggests you can potentially outperform the platform on loan losses. 

Will the cashback bonanza in property loans last? FC presumably hopes not, particularly having had to crank things back up from the lows earlier in the year. Expect publicity/education pieces on the merits of property backed lending given the apparent scope for more widespread adoption by the FC lender base. The proposed fixed rates for A+ SME loans in particular make the the rates on A+ property loans look anomalous and that may be the intention - to nudge investors towards loans which currently have the most trouble filling and which cost FC most in terms of cashback. If FC is successful in ultimately weaning itself off the reliance on cashback then that will be another leg gone for those who can't pick loans (FC's previously published data suggested that, collectively, we are not that good and certainly not as good as we seem to think).

I tend to agree. I am not really qualified to like or dislike this change because I stopped buying (almost) the auction loans around a year ago and adopted a strategy of buying the secured property for cash back and interest, selling after a few months and not worrying about diversity. Since the SME loans get sold after 6 months or so, I do not have many left and so the change does not affect me directly. But ancient posts will show that I thought it inevitable that FC would stop auctions for many reasons - those few people participating are the knowledgeable early adopters and not the target market of consumer lenders and institutions, the auctions leave rates too variable whereas FC would prefer to control rates for the commercial optimum, and of course the platform was just too complicated and could not be scaled up. Many lenders here are, quite reasonably, considering this as a change which has unwelcome personal consequences. But looked at from the point of view of FC and the interests of the majority of (silent) borrowers and lenders, the answer to the question of rate setting for the mature and growing business must be fixed rates? Why retain auctions?
There will still be opportunities, but perhaps different ones. Many of us are rather like small underwriters who will, for a consideration of some sort for the effort and the risk of low diversity, take on the loans which FC's system cannot fill. With fixed rates there should be more of these rather than fewer, and assuming that FC will not relax Autobid diversity for property loans, the property loans will still need promotions and may even present good holdings to term. FC's 1% is now the larger part of the income stream and so the fee can often be traded off in the interests of growing the loan book and shareholder value. However, the reduction of the SME rates will drive more lenders to property, if not off the platform, and FC presumably hope that the SME flippers will move to property and their better returns.
This change was inevitable. When dunmoaning we must look for new opportunities either on FC or on other platforms.
Edit: Did not see Nick's post. I agree that the ISA and the investment trust could affect property - especially if there is a property investment trust which takes a percentage of every property loan.

Had a spring clean last night, found 48 parts below new rates, put them on at par and now only twelve remaining.

Been through the current loan requests and only a few have rates available above the new rates.

Cost of borrowing going up at FC?

Yes, I sold 56 property loan parts at par yesterday - which is really exceptional, and not all to Autobidders. But I do list A up to 10% and A+ up to 9% at par, and so much of it was above the new rates.

I'm still amazed that Floating Criteria have not managed to invent an AA+++ rating band for secured property loans, and bomb the rates further. Right now they are pricing them (10% fixed, for instance) somewhere around A--- .. maybe they know more about the upcoming property crash than they are letting on?