adrianc
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Post by adrianc on Sept 9, 2016 7:24:45 GMT
How does one know if money on the SM is real peoples loans or if it is SS dump. Let's say there's £100k listed, you go to list a part and it'll sit at £85k in the queue, then you know that there's £85k of "real" selling, and £15k of SS trying to clear their own holdings. Punters always take precedence.
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nick
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Post by nick on Sept 9, 2016 8:19:58 GMT
A drought because, quite a lot of recent repayments, hence money about looking to be invested somewhere. I'm surprised more of that money hasn't made its way to FS, plenty of loans available at 13+% and one with 1% cashback on top... I have been slowly migrating money across from SS to FS to take advantage of the higher rates currently on offer, but mainly to help diversify away from my excessive reliance on SS. However, the cash drag prior to actual activation of the loan and the fact that interest is accrued until repayment rather than monthly probably makes the effective % not much lower than SS. Liquidity on the SM is also much lower so it more difficult to manage reinvestment risk/drag on realisation and reinvestment of funds which again is likely to reduce the overall % return.
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jonah
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Post by jonah on Sept 9, 2016 8:29:37 GMT
How does one know if money on the SM is real peoples loans or if it is SS dump. Thanks. If you try to sell a part and it bypasses the queue, then the parts are owned by SS. They put their parts behind ours, which is nice of them.
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SteveT
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Post by SteveT on Sept 9, 2016 8:34:11 GMT
I'm surprised more of that money hasn't made its way to FS, plenty of loans available at 13+% and one with 1% cashback on top... I have been slowly migrating money across from SS to FS to take advantage of the higher rates currently on offer, but mainly to help diversify away from my excessive reliance on SS. However, the cash drag prior to actual activation of the loan and the fact that interest is accrued until repayment rather than monthly probably makes the effective % not much lower than SS. Liquidity on the SM is also much lower so it more difficult to manage reinvestment risk/drag on realisation and reinvestment of funds which again is likely to reduce the overall % return. There is no cash drag on FS any more. You accrue interest from the day you bid, even if the loan takes weeks to fill & activate (as per SS and Ablrate)
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Post by jonboy73 on Sept 9, 2016 9:23:26 GMT
I have been slowly migrating money across from SS to FS to take advantage of the higher rates currently on offer, but mainly to help diversify away from my excessive reliance on SS. However, the cash drag prior to actual activation of the loan and the fact that interest is accrued until repayment rather than monthly probably makes the effective % not much lower than SS. Liquidity on the SM is also much lower so it more difficult to manage reinvestment risk/drag on realisation and reinvestment of funds which again is likely to reduce the overall % return. There is no cash drag on FS any more. You accrue interest from the day you bid, even if the loan takes weeks to fill & activate (as per SS and Ablrate) and you continue to get interest even when the loan part is up for sale...
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Post by jonboy73 on Sept 9, 2016 9:26:39 GMT
I also get the sense that the apparent lack of liquidity on the sm, is down to folk asking for a premium.
I have sold £1,000 on the same day in long dated loans (9 days old) at par. that also equates to tax free interest ;-) as the buyer of the loan pays it..
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Post by chrisuk on Sept 9, 2016 9:34:37 GMT
I also avoid loans to borrowers with a shady past. I just don't like the idea of lending my cash to anyone who has a history of being dragged through the courts for dodgy dealings. They usually get away with it and then start all over again!
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nick
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Post by nick on Sept 9, 2016 18:12:10 GMT
I have been slowly migrating money across from SS to FS to take advantage of the higher rates currently on offer, but mainly to help diversify away from my excessive reliance on SS. However, the cash drag prior to actual activation of the loan and the fact that interest is accrued until repayment rather than monthly probably makes the effective % not much lower than SS. Liquidity on the SM is also much lower so it more difficult to manage reinvestment risk/drag on realisation and reinvestment of funds which again is likely to reduce the overall % return. There is no cash drag on FS any more. You accrue interest from the day you bid, even if the loan takes weeks to fill & activate (as per SS and Ablrate) Thanks for the correction. I had thought that was the case, but when I recently made a bid the pop-up confirmation stated that interest would accrue from loan activation which I thought strange at the time. However, I have been unable to replicate the same confirmation when I just bid so maybe I was imagining the whole episode! The current T&C's do support what FS had previously announced re interest accruing from bid date. If I wasn't so lazy, I would actually check the calculation of accrued interest on some of my recent loans against the date I bid........
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Post by jonboy73 on Sept 9, 2016 22:37:18 GMT
There is no cash drag on FS any more. You accrue interest from the day you bid, even if the loan takes weeks to fill & activate (as per SS and Ablrate) Thanks for the correction. I had thought that was the case, but when I recently made a bid the pop-up confirmation stated that interest would accrue from loan activation which I thought strange at the time. However, I have been unable to replicate the same confirmation when I just bid so maybe I was imagining the whole episode! The current T&C's do support what FS had previously announced re interest accruing from bid date. If I wasn't so lazy, I would actually check the calculation of accrued interest on some of my recent loans against the date I bid........ I find the nuances of each site get confusing and mixed up, especially if when I haven't been on for a while.
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Post by martin44 on Sept 10, 2016 8:37:05 GMT
What's wrong with the fields please? Read through the updates from 2 months ago and judge for yourself. 1. land re-zoned? No 2. New CBRE Valuation? Who knows. 3. Has the request for a portion of the £3m materialized? No 4. Is the 6 month extension to allow for refinancing or because the borrower is struggling to refinance? 5. VR shows £12k per acre, in a fire sale £5k. I was lucky and got out of this one recently when a BH came along, i think this could prove to be very difficult to move on.
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SteveT
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Post by SteveT on Sept 10, 2016 9:04:08 GMT
5. VR shows £12k per acre, in a fire sale £5k. You state both figures as facts, yet the VR actually values the land at £9k per acre (most easily checked on tranches B and C, which contain no buildings) and I cannot conceive why anyone, let alone SavingStream, would accept £5k per acre for good quality agricultural land in SE England (regardless of any potential for future reclassification). Please justify your claims.
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Post by dualinvestor on Sept 10, 2016 9:35:14 GMT
5. VR shows £12k per acre, in a fire sale £5k. You state both figures as facts, yet the VR actually values the land at £9k per acre (most easily checked on tranches B and C, which contain no buildings) and I cannot conceive why anyone, let alone SavingStream, would accept £5k per acre for good quality agricultural land in SE England (regardless of any potential for future reclassification). Please justify your claims. I am not going to try and justify the values but according to Savills www.savills.co.uk/research_articles/141282/206610-0Agricultural land prices are stable to declining, the peak season for sales has passed and if will not be reached again until the Spring and uncertainty still prevails around Brexit. Maybe £5,000 is pessimistic for a fire sale but not outwith the bounds of possibility.
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Post by martin44 on Sept 10, 2016 9:51:09 GMT
5. VR shows £12k per acre, in a fire sale £5k. You state both figures as facts, yet the VR actually values the land at £9k per acre (most easily checked on tranches B and C, which contain no buildings) and I cannot conceive why anyone, let alone SavingStream, would accept £5k per acre for good quality agricultural land in SE England (regardless of any potential for future reclassification). Please justify your claims. No not facts, just MHO , my quick calculation was made on tranche D (worse case scenario?) £3.17m and 261 acres, a shade over £12k, i know this also includes the farmhouse, but was not meant as an in depth calculation, more a quick observation. As for the final price in a fire sale, SS could hold out as long as they so wished, but ultimately the market will decide the sale price.
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SteveT
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Post by SteveT on Sept 10, 2016 9:52:23 GMT
Copied from the Savills article that dualinvestor attached: "Our research shows that, during the first half of 2016, the average value of farmland across Great Britain fell by just under -2% .... Agriculture tends to do well in time of economic uncertainty. In addition, the weak pound creates opportunities for overseas buyers. Both of these factors, along with the anticipated reduced supply, may help support farmland values." So why would anyone accept anything close to a 45% discount (implied by "£5k per acre") versus a market valuation in Jan 2016 of £9k per acre? And why would a "fire sale" ever be needed when the land could simply be marketed for sale as standard and farmed under contract in the meantime. I quite understand that different people arrive at different opinions of individual loans but some of the nonsense being spouted about this one is ludicrous. Do I think SS were unwise to add news (presumably passed to them by the borrower or their intermediary) that the land had already been "re-zoned" without checking what had actually changed? - Yes. Do I think there is any problem with the underlying security of this loan? - No. |
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Post by dualinvestor on Sept 10, 2016 9:57:06 GMT
Copied from the Savills article that dualinvestor attached: "Our research shows that, during the first half of 2016, the average value of farmland across Great Britain fell by just under -2% .... Agriculture tends to do well in time of economic uncertainty. In addition, the weak pound creates opportunities for overseas buyers. Both of these factors, along with the anticipated reduced supply, may help support farmland values." So why would anyone accept anything close to a 45% discount (implied by "£5k per acre") versus a market valuation in Jan 2016 of £9k per acre? And why would a "fire sale" ever be needed when the land could simply be marketed for sale as standard and farmed under contract in the meantime. I quite understand that different people arrive at different opinions of individual loans but some of the nonsense being spouted about this one is ludicrous. Do I think SS were foolish to add news (presumably passed to them by the borrower or their intermediary) that the land had already been "re-zoned" without checking what had actually changed? - Yes. Do I think there is any problem with the underlying security of this loan - No. From a different, current, Savills report, the maximum rental value for arable land is £130 per acre, therefore a valuation of £12,000 or £9,000 would yield little more than 1%. Land is, by definition, immovable so you are relying on a willing buyer within a very snall radius that is why, if one was not available, you would accpt a discount.
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