small investors no longer eligible

Me sir,me sir-is it the property is worth less if you get chavs move in next door?

Pure coincidence but I posted on this site yesterday that I had just managed to fully exit LI - seems they were planning all along to see me off anyway!! I was with LI when it was £5K per investment minimum (the previous £10K was too rich for me) - and thereafter saw smaller and smaller investors tempted in as they lowered the threshold. It does seem a total about turn to adopt what is in many ways a near reciprocal position - although the criteria are different I suspect the new elite will nevertheless constitute the wealthier end of the current spectrum of LI investors.

Like one or two others here I won't miss LI - their loans used to be very tempting but latterly became the lowest interest rates of the eight (now seven) P2P platforms I use. They were useful for diversity but that was before a relative plethora of platforms came along. When they finally admitted they had no intention of initiating a SM (although they made as though they would for quite some while) that was really the final straw for me.

So I'm out and staying out - I can live without loans offering 7% with 75% LTV - and I suspect many others can too!!

littleoldlady. If you are happy with 7% (with 75% LTV) then good luck to you - you are clearly the kind of lender that LI are now actively seeking. However, I'll stick with the 12 to 16% (mainly commercial property) loans available on MT, FS, Abl, L and others. I accept they may well be higher risk (caveat emptor) but I don't consider they are double the risk (perhaps with the notable exception of the recent L 'borrower in receivership' offerings!?). If you really want to minimise your exposure you could always try your friendly local High Street Bank - they will be delighted to offer you a pittance for near zero risk!

It's good that there are different investors with different risk:reward profiles or we would all be after the same thing. But there is no need to be rude patronising. My question was genuine - I though that you might know of a platform paying more that 7% on residential.

The difference between 7% low risk and 12% higher risk is not so great. It only takes 10% of loans at 12% to suffer an average 50% loss and the net yield is 7%.

I would like to think that these investment companies that only want sophisticated investors make sure their staff are just as sophisticated in investments
With regards risk. its the same as any investment you invest at the risk you are happy to take whether its P2P or an emerging market fund verses an footsie 100 tracker.At the end of the day i think there is a place for low and high loan rates and it would appear as time goes on and more companies look for the more mainstream customers the rates will drop anyway.Sometimes the worse thing with investment is hindsight and wishing you had done something different, just ask the people who bought penny shares and were told they could not lose or that timeshare that would always rent and is now worthless. In the end just be happy to make a profit at your comfort level.

OK - let's bottom this one.

The return from 7% (low risk - theoretically) and 12% (high risk - allegedly) is only 'not so great' IF loans default in the manner described above (and of course that assumes no 'low risk' loans default (they're low risk but not no risk)) - which to date mine haven't (phew) and I've been at this game for some four years now. However, I'd be naïve to think it will/can never happen - indeed I have money in the Assetz Scottish property loan which has defaulted - but I'm confident of a full return of capital and interest eventually given the LTV (actually currently earning 14% in default interest!). The difference otherwise is of course a 5% return (12 -7) - and that's an awful lot of money over a four year period. Let's also remember it's not that long ago that you could get 15% on loans from LI - and I can't recall any defaults - nor were there any shortage of takers.

I really don't understand why LI have reversed their attitude to retail lenders - but that's effectively what they have done. Either retail lenders are now too much hassle (I sent my fair share of 'what's going on' missives), the institutional investors are now pumping in enough to more than float the boat without retail input or a combination of both - who knows?

I will reiterate what I said above though (as a joke initially) - if you extrapolate the low risk loan vs high risk loan argument to its logical conclusion then you end up with your money in the Bank - and we all know what that's worth. P2P is a risky enterprise and the core skill for any lender is an ability and willingness to mitigate that risk - those who 'auto invest' (not many who read and/or participate on forum I suspect) will likely get exactly what they deserve.

Body armour on - visor down!!

Comment?

You are only extrapolating in one direction. taking it the other way why not go for 100% interest in 60 secs (God knows what that works out to pa - I make it over 50 million % pa). Any Casino will provide this opportunity.