SteveT
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Post by SteveT on Aug 26, 2017 9:21:48 GMT
A recent PP arrival, I'm only investing in new listings so far, assuming that (being heavily oversubscribed) these offer better value than properties offered for sale on the SM. However, I'd be interested in the views of experienced PP hands as to whether there's good value to be found on the SM.
"Market prices" span a wide range of discounts / premiums, versus both Latest Valuation and (to a lesser extent) New Listing Price. I've attempted no rigorous analysis but my sense is that some of the price dynamics include:
1) High yielding properties priced higher than low yielding (no surprise) 2) Smaller properties priced higher than bigger properties (again, no surprise; basic supply & demand) 3) Recent new properties (pre-first revaluation) generally priced at a premium (presumably big hitters looking to flip their larger allocations in oversubscribed loans) 4) Profit-taking after the first revaluation (priced at a discount to Latest Valuation but a premium to New Listing Price) 5) A general bias against central London property (understandable in current market climate) 6) A general downward trend in pricing over recent months (has new property origination ramped up recently?)
There don't look to be many sudden lurches in pricing, as might be triggered by new information on property problems / tenancy voids / etc, but do existing owners receive updates that go beyond the very limited information displayed on the property pages?
Any further insight will be appreciated, before I decide whether to ponder the SM further...
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IFISAcava
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Post by IFISAcava on Aug 26, 2017 10:12:00 GMT
A recent PP arrival, I'm only investing in new listings so far, assuming that (being heavily oversubscribed) these offer better value than properties offered for sale on the SM. However, I'd be interested in the views of experienced PP hands as to whether there's good value to be found on the SM. "Market prices" span a wide range of discounts / premiums, versus both Latest Valuation and (to a lesser extent) New Listing Price. I've attempted no rigorous analysis but my sense is that some of the price dynamics include: 1) High yielding properties priced higher than low yielding (no surprise) 2) Smaller properties priced higher than bigger properties (again, no surprise; basic supply & demand) 3) Recent new properties (pre-first revaluation) generally priced at a premium (presumably big hitters looking to flip their larger allocations in oversubscribed loans) 4) Profit-taking after the first revaluation (priced at a discount to Latest Valuation but a premium to New Listing Price) 5) A general bias against central London property (understandable in current market climate) 6) A general downward trend in pricing over recent months (has new property origination ramped up recently?) There don't look to be many sudden lurches in pricing, as might be triggered by new information on property problems / tenancy voids / etc, but do existing owners receive updates that go beyond thevery limited information displayed on the property pages? Any further insight will be appreciated, before I decide whether to ponder the SM further... I like the SM - you can put bids at 10-20% discounts on current valuations, which are gradually matched, and which gives quite a lot of downside protection if prices decrease. Then, as long as you hold for 5 years that discount should be realised upon property sale. Careful planning should also ensure it is realised tax free (using capital gains tax allowances). And no, there is no additional info, but PP do publish a lot of financial details of all properties each month.
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snowmobile
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Post by snowmobile on Aug 27, 2017 9:38:58 GMT
I've only been investing with PP a few months, so hardly an experienced hand, but since you only have one reply I will comment anyway I would agree with your observations on the SM price dynamics. I am not sure that it is always the case that the new listings offer better value. In general the buying and negotiating power of PP has grown as the platform has grown. The bulk buying discounts obtained now on new listings were maybe not so common at the start. New listings are heavily marketed and the most recent listings have been oversubscribed partly due to the promotions offered by PP. SM purchases don't benefit from promotional offers such as the recent 5% enhanced income. They are also subject to an extra 0.5% charge for stamp duty. Just to clarify the point made above, the 5 year holding period runs from the date the property purchase originally completed. So if you buy into a property originally listed in 2015 you only have to hold roughly another 3 years to realise any discount. This is obviously subject to whatever happens to property values between now and then, but can be useful in capital gains tax planning. I think the best thing about the SM is that you can use the same funds to place multiple bids, unlike the system on Ablrate where each bid has to be funded individually. Therefore there is nothing to lose by adding a few cheeky low bids on as many properties as you want. The bid manager is a useful tool for setting up multiple bids at once. They are unlikely to match, but there is always a chance if a big hitter needs some funds in a hurry. One thing to watch out for is that all your bids will be automatically cancelled if your account balance falls to zero. If you have to set them up again from scratch it is not only time consuming but also puts you at the back of the queue at your chosen bid point. When pre-ordering a new listing it is better to fund your account first and then choose how much of your available funds you want to allocate to the new property. I would suggest keeping your account funded at least a couple of pounds above your chosen bid amount, so that it doesn't drop to zero if a bid is matched.
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Post by reeknralf on Aug 27, 2017 11:32:52 GMT
Another advantage to the sm, or more specifically to the earlier properties, is that the accounting provision for corporation tax would act as a buffer if the overall market falls.
Say the RICS valuation on an early property has gone up 10%, this will be accounted for as a 8.2% uplift in the share price after a provision for future corporation tax at 18%. Should RICS valuations fall 10% in the future, the drop in value will only be 8.2%. A recent pm purchase doesn't have this benefit.
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j
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Post by j on Aug 27, 2017 23:20:58 GMT
Looking at the SM, many properties around one year old or more have either been flat or declined vs forecasted price growth (esp in the capital where many have gone slightly south). Wonder when the property market reaches its nadir before a possible decline starts. PS I am an active investor with PP
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macq
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Post by macq on Aug 28, 2017 7:21:50 GMT
Looking at the SM, many properties around one year old or more have either been flat or declined vs forecasted price growth (esp in the capital where many have gone slightly south). Wonder when the property market reaches its nadir before a possible decline starts. PS I am an active investor with PP Would assume that people using PP are looking longer term so with the growth aspect it could be that auto invest works well.It would be like the advice given with shares & funds to drip feed your money in to buy less when high and get more when low to get a better average across time
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IFISAcava
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Post by IFISAcava on Aug 30, 2017 10:45:31 GMT
I've only been investing with PP a few months, so hardly an experienced hand, but since you only have one reply I will comment anyway I would agree with your observations on the SM price dynamics. I am not sure that it is always the case that the new listings offer better value. In general the buying and negotiating power of PP has grown as the platform has grown. The bulk buying discounts obtained now on new listings were maybe not so common at the start. New listings are heavily marketed and the most recent listings have been oversubscribed partly due to the promotions offered by PP. SM purchases don't benefit from promotional offers such as the recent 5% enhanced income. They are also subject to an extra 0.5% charge for stamp duty. Just to clarify the point made above, the 5 year holding period runs from the date the property purchase originally completed. So if you buy into a property originally listed in 2015 you only have to hold roughly another 3 years to realise any discount. This is obviously subject to whatever happens to property values between now and then, but can be useful in capital gains tax planning. I think the best thing about the SM is that you can use the same funds to place multiple bids, unlike the system on Ablrate where each bid has to be funded individually. Therefore there is nothing to lose by adding a few cheeky low bids on as many properties as you want. The bid manager is a useful tool for setting up multiple bids at once. They are unlikely to match, but there is always a chance if a big hitter needs some funds in a hurry. One thing to watch out for is that all your bids will be automatically cancelled if your account balance falls to zero. If you have to set them up again from scratch it is not only time consuming but also puts you at the back of the queue at your chosen bid point. When pre-ordering a new listing it is better to fund your account first and then choose how much of your available funds you want to allocate to the new property. I would suggest keeping your account funded at least a couple of pounds above your chosen bid amount, so that it doesn't drop to zero if a bid is matched. Absolutely - happened to me when I got a flurry of offers overnight and was very time consuming and irritating to reinstate them all. I would prefer the system paused them rather than cancelled them. I always keep several K in the wallet now to try and avoid this happening again.
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IFISAcava
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Post by IFISAcava on Aug 30, 2017 10:48:06 GMT
Looking at the SM, many properties around one year old or more have either been flat or declined vs forecasted price growth (esp in the capital where many have gone slightly south). Wonder when the property market reaches its nadir before a possible decline starts. PS I am an active investor with PP Would assume that people using PP are looking longer term so with the growth aspect it could be that auto invest works well.It would be like the advice given with shares & funds to drip feed your money in to buy less when high and get more when low to get a better average across time A problem is that autoinvest will buy at current offer prices, whereas if you set a bid up below current offer price, you will often find it gets matched over the next weeks. With some time, I think you can achieve a better result drip feeding manually on the SM.
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macq
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Post by macq on Aug 30, 2017 12:48:26 GMT
Would assume that people using PP are looking longer term so with the growth aspect it could be that auto invest works well.It would be like the advice given with shares & funds to drip feed your money in to buy less when high and get more when low to get a better average across time A problem is that autoinvest will buy at current offer prices, whereas if you set a bid up below current offer price, you will often find it gets matched over the next weeks. With some time, I think you can achieve a better result drip feeding manually on the SM. that sounds like a good plan.One of my worries with the 5 year sell out is that if the property has gone down and a few people get cold feet,rather then sticking it out it may need to be sold at a loss(unless i have misunderstood) if not sold on sm.So buying at a discount on the sm would be a good buffer
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IFISAcava
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Post by IFISAcava on Aug 30, 2017 13:51:15 GMT
A problem is that autoinvest will buy at current offer prices, whereas if you set a bid up below current offer price, you will often find it gets matched over the next weeks. With some time, I think you can achieve a better result drip feeding manually on the SM. that sounds like a good plan.One of my worries with the 5 year sell out is that if the property has gone down and a few people get cold feet,rather then sticking it out it may need to be sold at a loss(unless i have misunderstood) if not sold on sm.So buying at a discount on the sm would be a good buffer True - but that's the problem with buying with a crowd! Nothing to stop exiting investors buying up the resales on the SM if they think holding is a good bet. Also not clear (unless I have not read the relevant small print) what happens after that - presumably another 5 year term?
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macq
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Post by macq on Aug 30, 2017 14:06:03 GMT
not so much a complaint about the buying with a crowd more the fact that i can see an imbalance,even if it is the most democratic way by looking at it.In the sense some people may have done auto invest for a couple of months or put in £50 to try PP the property goes down and they see the 5 year option as a good time to get out while everybody else knows its better to stick.Or you could have one person with thousands do the seem thing,so when placed on the market at a true value not at a discount(i believe)then it may be hard to shift so forcing a sale of the property at the wrong time.Hopefully there will only be rises so not a problem
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Nomad
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Post by Nomad on Mar 5, 2018 16:05:09 GMT
A recent PP arrival, I'm only investing in new listings so far, assuming that (being heavily oversubscribed) these offer better value than properties offered for sale on the SM. However, I'd be interested in the views of experienced PP hands as to whether there's good value to be found on the SM. "Market prices" span a wide range of discounts / premiums, versus both Latest Valuation and (to a lesser extent) New Listing Price. I've attempted no rigorous analysis but my sense is that some of the price dynamics include: 1) High yielding properties priced higher than low yielding (no surprise) 2) Smaller properties priced higher than bigger properties (again, no surprise; basic supply & demand) 3) Recent new properties (pre-first revaluation) generally priced at a premium (presumably big hitters looking to flip their larger allocations in oversubscribed loans) 4) Profit-taking after the first revaluation (priced at a discount to Latest Valuation but a premium to New Listing Price) 5) A general bias against central London property (understandable in current market climate) 6) A general downward trend in pricing over recent months (has new property origination ramped up recently?) There don't look to be many sudden lurches in pricing, as might be triggered by new information on property problems / tenancy voids / etc, but do existing owners receive updates that go beyond the very limited information displayed on the property pages? Any further insight will be appreciated, before I decide whether to ponder the SM further... I've been with this platform for a while, but have just taken a look at the SM for the first time. I see that all but 11 of the 96 listings are shown with a best offer price at some discount to their latest valuation [Jan 2018]. 16 [all London/SE] are available at a discount between 15% and 20%. Of these 16, some are at a double figure discount on the new listing price, while others are at a small premium... I wonder whether these offerings represent a good opportunity for a longterm investor?
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shimself
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Post by shimself on Mar 5, 2018 20:33:15 GMT
I've been with this platform for a while, but have just taken a look at the SM for the first time. I see that all but 11 of the 96 listings are shown with a best offer price at some discount to their latest valuation [Jan 2018]. 16 [all London/SE] are available at a discount between 15% and 20%. Of these 16, some are at a double figure discount on the new listing price, while others are at a small premium... I wonder whether these offerings represent a good opportunity for a longterm investor? I think the valuations are more intended to offer false comfort to investors. Dashboard valuation 326 press Sell and it suggests instead 282. I think I'm going to swallow the bitter pill and leave, I hate being diddled
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hazellend
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Post by hazellend on Mar 5, 2018 22:00:28 GMT
I've been with this platform for a while, but have just taken a look at the SM for the first time. I see that all but 11 of the 96 listings are shown with a best offer price at some discount to their latest valuation [Jan 2018]. 16 [all London/SE] are available at a discount between 15% and 20%. Of these 16, some are at a double figure discount on the new listing price, while others are at a small premium... I wonder whether these offerings represent a good opportunity for a longterm investor? I think the valuations are more intended to offer false comfort to investors. Dashboard valuation 326 press Sell and it suggests instead 282. I think I'm going to swallow the bitter pill and leave, I hate being diddled You are not being diddled. There is a discordance between real market value and property partner secondary market value. The secondary market is pretty cool if you think about how liquid it is for selling property. If the dashboard valuation is 326 you can still put your shares up for sale at 326, but it probably won't sell. However, if you were to sell the property on the open market it probably would come close. Prices can go up or down of course. Property partner is the only property portal I will invest in going forwards.
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bigfoot12
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Post by bigfoot12 on Mar 6, 2018 9:07:31 GMT
I've been with this platform for a while, but have just taken a look at the SM for the first time. I see that all but 11 of the 96 listings are shown with a best offer price at some discount to their latest valuation [Jan 2018]. 16 [all London/SE] are available at a discount between 15% and 20%. Of these 16, some are at a double figure discount on the new listing price, while others are at a small premium... I wonder whether these offerings represent a good opportunity for a longterm investor? I think the valuations are more intended to offer false comfort to investors. Dashboard valuation 326 press Sell and it suggests instead 282. I think I'm going to swallow the bitter pill and leave, I hate being diddled What makes you think that you are being diddled? As hazellend says there is a price to exit now, which is lower than someone has valued the properties in many cases. This is no different to Investment Trusts which mainly trade (on a secondary market) at a discount to NAV (the fair valuation), except that PP SPVs are much smaller and less liquid and so the swings are greater. Most of the properties that have a high discount to valuation have been on the platform for a while and have a very low yield. I think a couple are very large (at the time it was thought that by buying 15 properties it might be possible to avoid the second home stamp duty), some will have invested hoping to diversify later. The site as a whole is overweight London property with 2% yields, it isn't surprising to me that these are offered for sale at steeper discounts. My portfolio (not just PP) is overweight London and so I won't be buying any of these, even at a 30% discount. I have just made a purchase (tiny - dividend money lying around my account), but rather than buy Hastings with a 15% discount and a 3.4% yield, I went for Hove with a 3.8% yield and an 8% discount.
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