'Property sector' too 'overweight' in popular platforms?

Largely depends on your view of the property sector & wider economy going forward & the quality/LTV of the property asset in question. However to be fair to FC there are lots of SME loans especially on the SM - the rates are usually better on the older ones, that were issued before the fixed rate change, as virtually everything since has miraculously become A+ or A rated, at rates that no longer reflect the risk IMHO. So the few C/D/E rated stuff is either dire quality &/or only available to the handful of bot operators, who then resell at a premium on the SM, effectively taxing normal investors for access with the tacit approval of FC, which is a very undesirable practice IMO.

Assetz has some decent SME loans too but rates have recently fallen due to now pricing for liquidity instead of risk (which they vehemently deny but the rates speak for themselves) but if you are patient you can accumulate positions via the slickly designed SM on older loans (with decent rates). Abirate does aircraft, currently a decent 13% option available, Moneything has some variety too but is so popular at present is struggling to match demand & has turned to property to help solve the issue.

SS used to do boats but with the exception of the Superyacht is solely property/land now but is a well run & user friendly platform, again getting swamped by demand due to doing a lot of the right things, has nearly £15m of loans in the next week so should present some buying opportunities.

Property seems to be what lenders want, partly because many have been disappointed by poor recoveries on small business loans.  It's also easy work for platforms/introducers/sponsors, compared to properly-done business lending.  You can't blame them for giving the punters what they want, but yes I do worry.

I take the view that losses are to be expected and you should not expect your long run return to exceed about 7%, regardless of what you invest in.  The difference with property is that losses tend to be highly correlated.  When the next property crash comes, the losses will all come at once and some of the platforms specialising in them may well fail - particularly those that promise the most today. 

There are still plenty of loans to small businesses on FC.  I'm not on that platform at the moment because my returns when I started were disappointing, but rates appear to be higher now and I am considering going back.  You could also consider TC if their minimum investment of £1,000 per loan does not put you off, although for the last year TC also has been increasingly dominated by property.

Otherwise you have consumer lending (RS and Zopa being the big two), pawnbroking (MoneyThing), invoice finance (MarketInvoice etc, also generally with a high minimum investment) or aircraft and containers (Ablrate).  There have also been renewables (mainly on AC and TC) but the end to subsidies means we are unlikely to see many more of them.  I think new investors may struggle to accumulate any significant exposure to renewables.

My personal p2p portfolio is concentrated in 3 platforms (TC, RS and AC) with TC being by some way the biggest.  I am still lending on property but only with a first charge or senior tranche.  Despite being selective I am beginning to think I've got too much.  I had a lot of exposure to renewables but many of those on TC have recently been refinanced with mainstream lenders at lower rates.  I'd like more if they were available. 

Below is a summary of my exposures on TC and AC, plus an overall summary including RS. (I have excluded monthly money on RS, which is a short term investment awaiting a better home.)  The distinction between "business" and "property" is a bit approximate.  Almost all of my business loans on AC have at least some property backing, and several of them are things like care homes, pubs and hotels.  Conversely, quite a few of my property loans on TC are half way to being business loans secured on property.


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It all depends on your appetite & tolerance for risk/reward; SS & MT offer loans against secured assets for a 12% return, also AC for 8-12% & Abi 10-13% - assuming valuations/LTV are taken as reasonable & accurate loans can be enforced but often involves lengthy legal delays, FC, Rbes, LC offer SME loans with no security other than PG's upto 18-20% (but I have several RBR/distressed loans that rely only on a PG that still maintain payments).

On the other hand unsecured personal loans rely on keeping overall default rates under control to complement provision funds; RS & Zopa offer upto 6% with proven track records, Bondora used to be 28% but now upto 90% HOWEVER FAILS DISMALLY ON THE DEFAULT FRONT.

Personally I started with P2P to help fund SME lending but did invest in Bondora as the rates reflected the risk but I struggle to see why investors prefer 6% with RS & their peers (although they appear to be a highly professional set up with great communications) as opposed to double that with asset security but I guess it takes all sorts.

By the time I left in early 2014, FC had increased the minimum rates to A+ 6.5%, A 7.5%, B 8.4%, C 9.5%, C- (now D) 11.2%.  When I started the rates were lower than that. Almost all C's were being bid down to 9%. 

To an outsider looking in, even if I assume I can only buy C/D/E on the SM, rates look much higher today.  Unless you are telling me that an A today is no better than a C was then.

I cannot tell you much about C rates or what the situation was in 2014. My experience started in Summer 2015 and I was concentrating on A+ loans. For these I was getting anywhere from 10% to 12% and I know that there are people who were getting even better rates. Also, it has been observed by people who can do better analysis than me, that loans that in summer 2015 would be placed in lower rates are now being rated A or A+.