Bricklane – 18 Month Results

18 Month Results (Regional Capitals Fund only)

The first 18 Month Results for investing through the Bricklane platform are as follows –

Expected ROI (Annualised) 5.00%
Actual ROI (Annualised) 2.39%

Following on from the previous results I have utilised the same method to set the ‘Expected ROI’ at 5.00%. The ‘Actual ROI’ comes in at 2.39%. Right, Bricklane is not technically P2P in the traditional definition, it is in fact a Real Estate Investment Trust (REIT), which is essentially an equity holding in a ‘bricks & mortar’ property fund. Where as P2P is traditionally a purchase and holding of debt, for a return. Bricklane also charge a sizeable deposit fee of 2.00% (1.00% for deposits over £20,000). My Bricklane holdings are still in a growth phase, meaning I am increasing my holdings, but with a 2.00% deposit fee I’m actually reducing my returns in the short term.

So my strategy has been to target an inflation level return (2.40%) before making a further deposit. Now for the clearer picture, if I remove the deposit fee then calculate the return, then anualise it (return /18 x 12) it comes out at 2.45% which can hardly be described as attractive. Bricklane also charge a 0.85% annual management fee further reducing returns. The UK property market has cooled significantly in recent months over the uncertainties around Brexit. This has resulted in a significant reduction in the bi-monthly property value appreciation payment, although it has not fallen to a negative so far overall (the share price has dropped though in the most recent calculation, for only the second time in the funds history, indicating a devaluation in some properties). The bi-annual rental dividend has also reduced over the last 3 payments despite my holdings increasing and this is a worrying trend suggesting there have been difficulties in generating the expected rental income.

Company and Fund Information

The London Fund 

The London Fund is now made up of 11 properties, 3 of which are undergoing a due diligence process. The combine value of the properties in the London Fund (including those in DD) is £5,058,000.00 with average property value of £459,818.18.

The Regional Capitals Fund

The Regional Capitals Fund is now made up of 67 properties, 16 of which are undergoing due diligence. The combine value of the properties in the Regional Capitals Fund (including those in DD) is £12,000,500.00 with an average property value of £179,111.94.

Both funds have continued to grow over the 6 month period although I’m not in possession of full figures for the previous 6 month period so can’t provide accurate, comparable statistics.

Conclusion

I take a slightly different approach with Bricklane as I view it as a very long term investment prospect, protentaily over 20 years. As I’m considering using it as part of a retirement fund. Even so I can’t deny the latest figures are disappointing, but we live in exceptional times. The Brexit worries that are cooling the UK property market should hopefully pass and I do believe any lost gains now will be recouped fairly quickly once the future becomes a little clearer. So Bricklane will remain within my portfolio but if I’m being entirely frank this is the first period I have entertained the prospect of dropping Bricklane and what alternatives I could source to replace it.

Referral Link for Bricklane

This link provides a referral bonus of £225 when a new customer signs up and invests £5000 using the link (T&C’s apply). The bonus is split £125 to the new customer and £100 to Proptechfish.com Any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated.

 

Growth Street – 6 Month Results

6 Month Results

Expected ROI (Annualised) 5.20%
Actual ROI (Annualised) 4.62%

The ‘Expected ROI’ is taken from Growth Street’s own marketing material. The Actual ROI coming in at 4.62% is a little low. The main factor for this is month one was a part month and 6 months is fairly early days so the effect on the annual rate will be slightly exaggerated, ie. after 12 months the effect should be reduced. As far as I can see, I have experienced no defaults in the 6 month period. Growth Street has a unique model in which each loan part contract is only held for one month by each lender. While this tactic migrates risk for the majority of lenders, there will be unfortunate individuals left holding a bad debt parcell when a bad debt occurs. Growth Street dose however operate a provision fund it calls the Loan Loss Provision (LLP) but as I say I’m yet to experience how this works in practice myself.

Deal flow has been perfectly adequate for my holdings to be invested in no more than 3 working days so cash drag has been minimal. In terms of my own experience with Growth Street there’s not really much more to say at this point.

Company Information

Going back to Growth Street’s LLP in general, it looks like some difficult lessons have been learnt. 2017 saw a higher claim against the LLP then funds available while 2018 saw a substantially higher claim (almost double) against the LLP. This deficit was covered by a further £450,000 cash injection from the founders. Now Growth Street have claimed this was down to financial product they have since discontinued so they believe they will not be effected in the same way going forward. Indeed much of balance has been written off as fraud. While it’s disappointing to see a P2P platform getting it wrong it’s refreshing to see them take accountability and move quick to fix the problem. I’m also reminded they are still a very young company.

It’s predominantly because of this unfortunate episode that Growth Street remain some way off profitability. However they have also just completed a further funding round for £7.5 million so they should be fairly well financed for a little while at least. Growth Street held an investor Q&A on the 6th March 2019, unfortunately it was short notice for me and I was otherwise engaged, of course I would have attended. Again, it’s good to see Growth Street step out from behind the platform to reassure their human investors that they are taking their responsibility as custodians of their funds seriously.

Conclusion

I do like Growth Street, the layout of the platform and the product they are offing. I would like to see the ‘Expected ROI’ rate and ‘Actual ROI’ rate come closer together over the next 6 months. I will increase my holdings but with some reservation until I see more evidence of a platform learning lessons and maturing. So yes their place within my portfolio is safe for the next 6 months, but I will be watching their progress very closely.

Lending Works – 18 Month Results

18 Month Results

The first 18 month results for investing through Lending Works are as follows –

Expected ROI (Annualised) 6.50%
Actual ROI (Annualised) 5.32%

The expected ROI rate is taken from the current 5 year product offering. I should note that this rate has been increased from 5.50% over the last 18 months so I wouldn’t actually expect it to be 6.50% but maybe 6.00% would be accurate. As you can see the ‘Actual ROI (Annualised)’ rate has come in a 5.32%. Now for a comparable my internal account, weighted rate (average across all current loan holdings) is 5.82%. Considering expected defaults and late payments I’m fairly happy with the rate of return and it’s falling within expectations.

Cash drag has been a hot topic in recent months, and Lending Works tried to add information on investment queue times to both the 3 year and 5 year product. While it’s always a welcome to see a platform adding more information and transparency the estimated queue times (initially 1-7 days) were criticised for being somewhat inaccurate, these have now been amended, 7-14 days and 21-28 days respectively. It remains to be seen how accurate these new estimates prove to be. For my part I’ve not experienced cash drag as I’ve not made any new deposits over the last 6 months, re-payments have been re-invested in hours not days.

Lending Works have recently announced their minimum loan part allocation is going to increase from £1.00 to £10.00, in order to reduce the administrative burden on the platform. While they claim this will have little effect on larger account holders over a £1000.00 they have acknowledged a more acute effect to smaller account holders below £1000.00. I will of course monitor the effects of this change over the next 6 months.

Company Information

Total lending on the Lending Works platform reached £157,000,000 by the end of this period, up form £130,000,000 (20.77%) on the previous period. Default rates are tricky to interpret in 6 month periods against 5 year loan terms as many defaults statistics are added to previous periods after they have pasted (this is true with all lending and P2P not just Lending Works). However it would appear default rates remain fairly consistent and are no cause for concern. Average Borrower APR rate has increased again with 2018 ending as 12.10% up from 11.20% on the previous period and currently sitting at 10.70% weighed life time average. The level of the borrower APR is intrinsically linked to the quality of borrowers as higher quality borrowers will seek out lower rate loans available to them, that said lender returns have also increased to maintain the consistent risk/reward profile for the lenders. Total lending accounts on Lending Works are now 5400 with an average account size of £22,500. (NB. Most Lending Works statistics are provided via quarterly updates so some of the data analysis for the end of this period has been done with some estimation and averaging).

Conclusion

Lending Works will remain within my portfolio for the next 6 month period as I am happy with the returns and the performance of the platform as a whole. However I will monitor closely the accuracy of the new ‘estimated matching’ tool and the effects of the £10 minimum loan part. I intend to increase my holdings with Lending Works over the next period.

Referral Link for Lending Works

This link provides a referral bonus of £100 when a new customer signs up and invests £1000 using the link (T&C’s apply). The bonus is split £50 to the new customer and £50 to Proptechfish.com, any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated.

Moneything – 12 Month Results

12 Month Results

The first year results of investing through the Moneything platform are as follows –

Expected ROI (Annualised) 12.00%
Actual ROI (Annualised) 10.38%

The ‘Expected ROI’ figure is taken from an approximate average across all my loan holdings stated return on the Moneything platform. The ‘Actual ROI’ figure is sufficiently close to expectation in my opinion. In fact Moneything was one of my standout performers in 2018. 18.00% of the loans I’m holding have fallen in to the category ‘Non performing’ in this period, this means they are currently not paying interest and could eventually fall into full default if they continue to not perform. 18.00% is higher than an industry expectation of 10.00% but I have relatively few loans in comparison to the entire loan book.

There has only really been one substantial issue with my experience with the Moneything platform in this period, and that’s deal flow. A single substantial loan was launched on the platform using a innovative offer, it failed to fill, was pulled and relaunched using a different offer. It did eventually fill but both attempts took up several months and Moneything tend to focus on one deal at a time. There were a couple of other loans of a different asset security type but these were relatively small and filled very quickly (hours not days).

Company Information

By the end of this period company stats were £91 million in originated loans. £22.6 million live loan book and 5197 active lenders. There has been a lot talk around Moneything in recent months about the potential introduction of discounted/premium secondary market. It’s an interesting idea that some platforms have already delivered very well while some platforms have attempted it with less successful results. It’s an innovation that generally increases liquidity but depending on how it’s presented it can catch out less experienced lenders who pick up dumped loans that turn out to be much higher risk than they understand. There has been no confirmation to date on this innovation or indeed a proposed introduction date.

Conclusion

I’m happy enough with Moneything to keep in my portfolio for the next period. As stated deal flow has not been great, in fact I actually withdrew idle funds from the platform as I had nowhere to put them without going beyond my comfortable loan limit, they were effectively dead funds/causing cash drag. It’s frustrating because this portfolio is in stage one growth, meaning I want to be depositing not withdrawing. I will look to re-deposit on the announcement of new offerings.

Landbay – 18 Month Results

18 Month Results

The results for lending through Landbay over the last 18 months are in and they are as follows –

Expected ROI (Annualised) 3.56%
Actual ROI (Annualised) 3.56%

The ‘Expected ROI’ is ratioed at just over half of the balance on an earlier 3.69% fixed rate and the later 3.49% fixed rate offering. As you can see Landbay delivers bang on expectation for the 2nd time in 3 reviews they’re nothing if not consistent. Other than that there’s not really a lot to say. Not the most exciting platform by any stretch and the rates are the rates, marginally better than a one year saver although at least you can build monthly compound with Landbay.

There’s a recalculation of LIBOR due in January (Landbay recalculate LIBOR on a 3 month average) so I would expect the tracker rate to increase slightly, it’s usually around LIBOR plus 2.50%. I can’t imagine it would go higher than the fixed rate right now though.

Company News

At the time of this review Landbay were approaching £250’000’000 in total mortgage lending since they started life in 2010. This is made up of approaching 900 mortgages, c50.00% of which are in London. Landbay has still maintained it’s nil default record to date, an accolade that is increasing rare in the wider P2P sector. There are some whispers of a further crowdfunding round in the offing although it has not yet been confirmed, if it goes ahead it will be Landbays 11th funding round.

Conclusion

Landbay is one of them fire and forget platforms that gets on with the job without fuss and just like a (non UK) train arrives on time every time. The price you pay for consistency and convenience is reflected in the lower end rate on offer compared to the wider P2P sector. So Landbay will remain in my portfolio as a relatively sound foundation to the riskier but higher potential reward platforms I lend through.

Referral link for Landbay

This link provides a referral bonus of £100 when a new customer signs up and invests £5000 using the link (T&C’s apply). The bonus is split £50 to the new customer and £50 to Proptechfish.com, any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated. 

Brickowner – An Introduction

Introduction

Brickowner was launched in early 2017 offering retail investors the chance to invest in a slice of an institutional property investment opportunity. These kind of investments are traditionally beyond the reach reach of the smaller retail investors with a typical minimum buy in at £25’000 upwards. With Brickowner you can invest from as little as £100.

Brickowner is structured to working with experienced and established property developers and asset managers. These more experienced partners bring with them the access to these larger institutional investment opportunities. Brickowner operates as an appointed representative of Gallium Fund Solutions Ltd, who is fully authorised and regulated by the FCA in the UK.

Brickowner typically charges an upfront fee of 3.00% when investing in an opportunity although fee structure can vary per property (please check the specific property term sheet before investing in an opportunity). If a 3.00% charge is applicable, it’s inclusive, meaning if you invest a minimum of £100 you will actually invest £97 paying a £3 fee.

Brickowner currently does not operate a functionable secondary market place so an early exit is generally not possible. Deposits can be made via debit card (instant) or bank transfer (typically 3 working days).

The Property Page

Screen Shot 2019-02-02 at 09.01.22
A sample of the Brickowner property page

Brickowner can offer two types of return on an investment opportunity. An income payment typically received per annum throughout the duration of the project and/or a completion payment once the project is finished. For Example the ‘All Saints’ project offers a 5.00% income payment over 4 years (20.00%) plus a completion payment of 20.00%, totaling 40.00% over 4 years (or 10.00% per annum).

Referral Link For Brickowner

This link provides a referral bonus of £100 when a new customer signs up and invests £1000 using the link (T&C’s apply). The bonus is split £50 to the new customer and £50 to Proptechfish.com Any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated.        

Referrals Links and Sign Up Bonuses

This page contains all the the referral links and sign bonuses I currently display throughout the Proptechfish blog.

 

Referral Link for Bricklane

This link provides a referral bonus of £225 when a new customer signs up and invests £5000 using the link (T&C’s apply). The bonus is split £125 to the new customer and £100 to Proptechfish.com, any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated.

 

Referral Link For Brickowner

This link provides a referral bonus of £100 when a new customer signs up and invests £1000 using the link (T&C’s apply). The bonus is split £50 to the new customer and £50 to Proptechfish.com, any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated. 

 

Referral Link For Funding Circle

This link provides a referral bonus of £100 Amazon gift card when a new customer signs up and invests £2000 for a full calendar month using the link (T&C’s apply). The bonus is split £50 gift card to the new customer and £50 gift card to Proptechfish.com Any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated.

 

Referral Link for Landbay

This link provides a referral bonus of £100 when a new customer signs up and invests £5000 using the link (T&C’s apply). The bonus is split £50 to the new customer and £50 to Proptechfish.com, any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated. 

 

Referral Link for Lending Works

This link provides a referral bonus of £100 when a new customer signs up and invests £1000 using the link (T&C’s apply). The bonus is split £50 to the new customer and £50 to Proptechfish.com, any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated.

 

The referral link for Lendy has been removed because I am no longer willing to lend on their platform. The other platforms I review that do not have a Referral Link/a Sign Up Bonus is because there is no Link/Bonus readily available for their platform at this the time.