Property Crowd Loan PC3 S****** B******** Milton Keynes

Thanks charles. Actually I am mostly interested in 1). If the borrower is contractually obliged to pay an extra 1% per month to the Principal Lender to extend the loan beyond 7th September then they'll have a pretty strong financial incentive to repay on time. I could already see from the Bond Term Sheet that no additional interest would be payable to us as bondholders, hence my wish to understand the repayment incentive from the borrower's perspective!

I would kindly refer you to the updated Default & Acceleration section in our deal room for details, but in essence no lender has voting control and all participants in the loan facility are bound by a pre-agreement in a scenario of default. 

Dear P2P Forum-ers,

The first close of our current live bond issue will take place tomorrow.

With subscriptions of nearly £400K to date and just over a week to go before the end of the 2016/17 tax year, we expect interest to pick up materially through the tax year change, as investors will no doubt be looking to take advantage of their ISA allowances.

As a reminder, the bond offers an annualised yield of 10.2% over a 6-month term, via exposure to a senior loan secured by first charge on a build-to-rent residential development.

Furthermore, the underlying senior loan benefits from a conservative gross loan-to-value (LTV) of 52.5% against the current full market value of the existing property.

If you would like to subscribe in time for this close and start accruing yield from 29 March, you will need to ensure that cleared funds are received by our Custodian by no later than 3pm tomorrow.

As always, please consider your investment carefully, but act quickly. Happy investing!


Kind regards
Charles

charles - not to be negative, but are you disappointed in the relatively low (in terms of availability) uptake on this offering? I can see why that might be (10.2% might only be attractive to people who have ISA allowances available, which will not be everyone at this point in the FY, and so maybe it'll uptick in the new FY in a few days time), but wondering if you had any other comments to make. Thanks.

Dear fellow P2P Forum members,

Since we introduced the Property Crowd ISA last month - enabling our investors to hold high yielding, asset-backed bonds in a tax-free ISA - we have received a surge of interest and the response has been most encouraging.

We would like to confirm that our ISA admin fees have now been finalised and we are delighted to announce that the charges will be less than originally advised at 0.95% per annum with no additional charge for transferring in an ISA from your existing provider.

Furthermore, we can confirm that those investors who made an investment through their Property Crowd ISA last month will also enjoy this reduced fee from inception.

You can transfer your existing cash, stocks and shares, or Innovative Finance ISA to a new Property Crowd ISA. If you wish to start this process, please contact us for further details.

Keep in mind that the annual ISA allowance increased to £20,000 on 6 April and you are free to increase your allocation in our current offer using this year’s allowance.

With weekly closes every Wednesday, your money gets put to work without undue delay.

As always, please consider your investment carefully, but act quickly. Happy investing!


Kind regards,
Charles

In my experience (across multiple platforms over several years), most P2P lenders look first at the rate ... then lend or move on. Some will also look at the quoted LTV figure (without checking how it's been calculated). A minority are willing to invest time reading the valuation and any other supporting documents provided. Fewer still conduct any separate "due diligence" of their own. It's fair to assume that forum members are mostly in the latter 2 groups.

This behaviour underpins my rule of thumb that lender demand roughly doubles with each 1% increase in rate. Hence a 10% loan is likely to fill roughly 4 times slower than a 12% loan (on the same platform). There are exceptions of course, and you can only really compare across similar asset classes, but it's pretty consistent across multiple platforms. Wierdly, things like whether the loan enjoys 1st or 2nd charge security have much less impact. 

Ps. There's a self-reinforcing aspect to this too. Many platforms, knowing how their lenders operate, tend to price to demand as well as risk. Hence a £250k secured loan at 60% LTV might be offered at 11% whilst a £1m loan with ostensibly identical security is offered at 12%. Even lenders who study both loans in detail are therefore minded to put more money against the 12% loan (I do this myself!)