Ablrate Results – 6 Month Results

6 Month Results

The first 6 months results of investing through the Ablrate platform as as follows –

Expected ROI (Annualised) 12.50%
Actual ROI (Annualised) 5.32%

The ‘Expected ROI’ figure on this example is taken from Ablrate’s own marketing material (an average of 10-15%). The ‘Actual ROI’ looks bad but there are a few things to factor in, firstly I utilised the secondary market place for most of my buy-in’s to loan parts inataily. Ablrate offer a premium/discount secondary market place with a small transaction fee. Some of the loan parts were bought at small premium too when considering their relative position in the returns cycle. So the returns for the first couple of months of my account were actually negative. If I was to exclude those factors I think the the returns would be much closer to the ‘Expected ROI’ figure.

Also within the first 6 month period turbulence was experienced in respect to specific loan repayments. I’m not inclined to discus specific loans but the kind of turbulence experienced included, late payments, missed payments and ultimately a number of loans being suspended. While problems are to be expected with-in the P2P lending sector, what really matters is a platforms ability to remedy those problems. Over the period I would say 20.00% of my loan holdings have had problems but half of those were brought back on track, the other 10.00% have been adequately updated and are within weeks of a proposed remedy. 10.00% problematic loan parts are about in line with what to expect across the lending sector so not a major concern.

My only slight disappointment with Ablrate so far is that their loan origination is one of the slowest I have come across. Meaning minimal diversification (1% or lower in each loan) is neigh on impossible within a reasonable length of time. Unless you utilise the secondary market (which I did) but that costs returns upfront. Of course the positive spin is they are taking longer in offering decent quality loans, which I recognise. The loan offerings I have looked at seem to be a higher quality compared to some other higher volume platforms.

Company news

By the end of this period completed loans were in excess of £42’000’000, interest paid to borrowers was over £5’200’000. Ablrate announced the intention to launch a funding round via the CrowdCube equity platform at the start of 2019, more to follow on this in the next results update.

Conclusion

I really like Ablrate from what I have seen so far, they seem like a well run platform full of quality professionals who seem to take their responsibility for lenders money seriously. Loan generation is a bit of a let down but I accept it in exchange for an improved level due diligence and loan quality offering. As far as my portfolio goes the traditional parameters I apply of returns over time are restricting further deposits right now. So yes deposits will be increased but it’s just a case of when the realised returns are high enough to allow it.

Lending Works – 12 Month Results

12 Month Results

The first full year of lending through the Lending Works platform are as follows –

Expected ROI 6.00%
Actual ROI 5.36%

The ‘Expected ROI’ for Lending Works is taken from the stated return for a 5 year deposit, which has remained at 6.00% for this period. The ‘Actual ROI’ for these results has seen a slight upward revision, from 5.24% ROI to 5.36% ROI. This upward trend was expected as the 5 year rate was increased in month 4 as discussed in the previous results. Even so i would have expected the ‘Actual ROI’ to be a little closer to the ‘Expected ROI’ after this period. So it leads me to believe that were probably late payments or even defaults on the loans i’m assigned to. Of course Lending Works being an entirely ‘Black Box’ platform there is no way of knowing this as you are given no specifics on where your money is actually lent, other than UK loans.

Total loans on the Lending Works platform have increased in the 12 months by 53% from £85 million to £130 million, making it a substantial player in the P2P personal loan type sector. This year is shaping up to be Lending Works lowest bad debt rate since its inception which is impressive for a company of this type and scale. Rate currently 0.1% however we are only 9 months in to this year so this figure might rise when more defaults are written off by the end of the year. Interestingly the borrower APR has increased in 2018 by 2.00% to 11.2% meaning borrowing is more expensive, although it doesn’t seem to have slowed demand.

Conclusion

I am perfectly happy with the Lending Works platform at this time and the rate of return I am reviving. I do not intend to withdraw any funds in the short term, in fact quite the opposite, I will continue to grow my deposit over the next 6 months.

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.

Growth Street – An Introduction

Introduction

Growth Street Exchange Limited (full name) is a UK based, business focused P2P lender launched in 2015. The minimum deposit and minimum loan part for Growth Street is £10, made via bank transfer only. Current advertised annual return is 5.3%.

How Growth Street works is interesting, once a deposit has cleared you place an order on the market for the deposit to be assigned to a loan (Growth Street is ‘black box’ in nature so it chose the loans for you although you can view more detail on a loan once it’s been assigned) . All loans however are on one month rolling contracts. This means your deposit plus interest is redeposited back to your account balance at the end of the month, to be re-instructed for lending on new loan. This effectively means a total account closure/withdrawal could be performed in as little as a one month. This potentially makes Growth Street one of the most liquid P2P offerings on the market to date. Worth noting this is excluding the effects of defaults, which would be ‘unsellable’.

Growth Street does not offer a secondary market place so you are tied in for at least the month of the contract.

Growth Street Summary Page

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Summary Page for Growth Street

Money On Loan – shows the total balance currently assigned to loans.

Money On Market – shows the any open orders awaiting loan part assignment.

Holding Account Balance – shows any funds not yet on loan or queued for lending, with a minimum loan part of £10, cash drag is a factor with Growth Street. These holding balance funds can be withdrawn at anytime.

Current Interest Accrued (Unpaid) – is the outstanding interest on live loan part that should be expected with-in the next four weeks.

Interest paid to date – is the total interest paid on the deposited balance excluding accrued interest.

To perform a total account withdrawal you will first need to turn off the ‘Reinvestment’ instruction, accessible from the top right dropdown menu on the main website.

Unbolted – An Introduction

Introduction

Unbolted is a P2P platform established in 2013. Unbolted is a trading name for Open Access Finance Ltd . The platform offers borrowers four types of loan : a personal asset bridge loan; a sales advance loan; a bid now, pay later loan and a small business loan. From the lender perspective these loans fall in to three different protection levels : ‘Gold Trust’ insures lenders against a drop in gold price for loans secured against jewellery and watches ; ‘Provision trust’ used against most other loans types designed to be used in the event of a short fall in repayments to a lender (at the discretion of Unbolted) ; occasionally Unbolted offer unsecured loans usually to know and trusted borrowers.

For the most part Unbolted is an Auto-Invest platform. You pick which of the three loan types you want to invest in, deposit a minimum of £100 and diversify for as little as £5 per loan, click confirm and Unbolted will do the rest. Interest is accrued daily with an advertised annual return rate of around 7.2%.

The main account page

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Main account page for Unbolted

The account page is basic and I like basic.

Loans On Sale box – if you click the buy now button you will see any loans you can manually buy in to now. However these tend to be quite rare as most will opt for the ‘Auto Invest’ function which fill loans very fast. Be careful though as the available loans may well be ‘Unsecured’ loans that are less popular for ‘Auto Invest’. I’m not suggesting these loans are of any less quality but they will require reading on your part to work out if you are personally comfortable with the risk/reward on offer. The ‘Auto Invest’ button allows you to adjust your ‘Auto Invest’ preferences at any time as discussed previously.

Add or Withdraw Funds box – deposits via bank transfer, usually 2 working days to clear, minimum of £100. Withdrawal of ‘idle’ funds is immediate (24 hour bank processing) but withdrawal of assigned funds will require your loan parts to be sold/transferred first. Make sure you pause ‘Auto Invest’ first otherwise your funds will just go round in circles. Selling of loan parts is conditional to market availability of buyers, generally allow a few days per £1000 being sold.

My Portfolio box – shows your live headline figures. ‘Cash balance’ is idle funds and withdrawal-able at any time. Investment balance is the total you have assigned to live loan parts. ‘Total Portfolio Value’ is the two figures combine. You can also ‘View Portfolio’ and this will list every loan you are currently invested in. It includes details like loan type: start date; due date; last repayment date; loan status and loan part size.

My Returns box – shows you total platform deposits against your total interest earned to date.

My Recent Investments box – gives you a snapshot of your last five loans you invested in. You can view the full list by clicking ‘View Portfolio’.

Funding Secure – An Introduction

Introduction

Funding Secure started life in 2012 as a pawnbroking P2P platform. To date it has issued £175 million worth of loans and advertises an investor base 3,500. Although it started life as a pawnbroking platform, for the last 3 years it has taken on property backed loans also. Funding Secure loans are usually for 6 month terms and unlike some platforms who pay a monthly return, loans accrue interest daily but is not paid until the end of the term and only if the loan is settled.

Minimum deposit for Funding Secure is £100 made by bank transfer, with a £25 minimum loan part purchase. Rates of return on offer range from 12.00% to 16.00% per annum. There are no charges for lenders and Funding Secure offers a secondary market for early sell out dependant on a buyer being available.

The Secondary Market

Funding Secure’s secondary market place is a little more complicated than some of it’s competitors. When it comes to tax liabilities the individual left holding the investment at term is liable for the entire term. For example if you snap up a 3 month old loan hold it for the remaining 3 months you are liable for the tax on profit for the full 6 months. This is because the interest for the whole term is paid to whoever holding the loan part at maturity. To reflect this you can pick up secondary loans for as much as 1% discount (or a 1% premium if demand for a particular loan is high, or is closer to maturity) .

On the flip side of this if you are selling primary loans, and effectively passing on the tax liability, or selling for a premium (up to 1%) you can make a tidy profit (with a significant volume) when it comes to tax liabilities at the end of the financial year. I would seriously suggest holding off from getting involved in the secondary market if you are either new to P2P or the Funding Secure platform for at least the first year because if you are not too savvy you may end picking up problematic loans with tax liabilities you ratter wouldn’t have. Some loans get dumped for a reason.

The Funding Secure dash board

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The Funding Secure dashboard

Available funds – is the in-active balance on your account. This can either be invested (£25 minimum) or withdrawn.

My current investments – shows the total principle you currently have invested in loan parts. These funds can only be released on term and repayment of the loan, or a successful sale on the secondary market place.

Allocated funds – shows any funds you have put to a loan part that have not yet been accepted (interest will still accrue before the borrower accepts your offer of funds). It can take a little a while for offers to be accepted ( I’ve experienced as long as 4 weeks ).

Available investments – lists the investments currently available on the platform for investment. Information includes –

  • Reference – the loan ID.
  • Title – a brief description.
  • Amount – total size of the loan.
  • Rate – Anual ROI.
  • LTV – is the Loan to value of the security (capped at 70%).
  • Progress – shows how much of the loan has been funded so far.
  • Updated (scroll right) – shows any recent material changes to the loan.
  • Invest (scroll right) – shows the button to invest.

Bricklane – 6 Month Results

6 Month Results

The results for the first 6 months of investing through Bricklane are in, and they are as follows –

Expected ROI 5.00%
Actual ROI 0.54%

Now there needs to be some background to these figures for them to make a little more sense. The Expected ROI is taken from a few published figures from 3rd parties and I levelled 5.00 % as a sensible average target. The fact is Bricklane don’t make a big deal of an expected return, partly because regulations require at least 2 years of track record to advertise a return as a figure (which Bricklane are not quite there), but the main reason being Bricklane is very different to a traditional P2P investment platform ( in-fact it actually classifies as an ISA) . It’s easy to calculate an expected return based on the given percentage for each loan part, but with Bricklane you are investing in a share of an overall property portfolio, plus a share of the rental dividend pro rata.

So although a near 90% disparity between ‘Expected ROI’ and ‘Actual ROI’ looks worrying, it’s not as bad as a seems. Bricklane charge a 2% deposit fee (ouch) on balances under £25’000 (1% for over £25’000), plus a 0.85% annual servicing fee. This meant it took a couple of weeks short of 6 months to realise a profit. If that trend continues for the next 6 months (without anymore deposits) that would result in an annual return of just north of 2%, based on portfolio growth. That is only one revenue stream though, the second being a share of rental income paid every 6 months.

At the time of writing this blog I have now received my first share of rental income dividend, however because it fell just behind the 6 months cut off for compiling these figures (it will be included in the figures for month 7) I didn’t want to distort the results for 6 months. I’ve give you a clue though, 5.00% annual ROI is looking fair right now.

To conclude, I must admit I’ve been lukewarm about Bricklane for months, thinking a 2.00% annual ROI (- 1.00% when factoring in inflation) is hardly call for cracking out the party poppers. Now with the rental income dividend paid, it starting to look a little more rosy. What i have always liked about Bricklane though is firstly it’s heavy weight backing ( backed by Zoopla ), secondly you are invested in owned bricks and mortar, not a debt transaction that can default like most P2P property platforms, finally there are no withdrawal transactions or secondary market queuing. So once you have paid the deposit you money is theoretically accessible at any time.

I am considering increasing my investment in Bricklane but it means writing off most of this years gains (at the cost of a 2% deposit charge) for higher gains later on down the line, which of course are never guaranteed.

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.

Lending Works – 6 Month Results

6 Month Results

The results for the first 6 months of investing through Lending Works are as follows –

Expected ROI 5.75%
Actual ROI 5.24%

For the first 3 of the 6 months the 5 year rate was set at 5.5%, which then increased to 6% (3 year rate currently 4.5%, March 2018) , so the 5.75% ‘Expected ROI’ is the average over the 6 months. This is a unique feature of Lending Works, both the 3 and 5 year rates are reviewed on a weekly basis and can go up or down the for following week. The discrepancy with the ‘Actual ROI’ can largely be put down account roll up (deposits/invested funds not falling on complete months), this is something you need to consider with most of these P2P platforms. In an ideal world you want a deposit to clear and start earning interest on the 1st of the month so you get a nice full maximum return for the month, in reality this generally does not work. A lot of platforms still only offer deposit via bank transfer (Lending Works do offer Debit Card deposits) which typically take 2-3 days to clear, and then it can take anywhere from 1 to 10 working days for the funds to be assigned an investment opportunity and start earning interest. Hence why you should generally expect a slightly lower ‘Actual ROI’ to ‘Expected ROI’. This deficit should reduce tough the longer you are in a fund, providing the platform is delivering what they claim to be offering.

Lending Works also has a reason to shout about, in October 2017 it became the first P2PFA member to be granted full FCA authorisation. This is no small feat, as the P2P sector develops in to a maturing market, a number of platforms have fallen foul of the FCA and consequently shut up shop. Lending Works was also able to launch its own ISA in February 2018, meaning investors now have a tax free (up to £20’000) offering. Lending Work’s is also set to break the £100 million in loans mark in April 2018, just four years after opening its doors.

There is simply no reason for me to consider dropping Lending Works from my portfolio at this time. The returns are healthy and pretty much as expected, the company appears to be in good health the the future looks promising. That being said it’s still very early days for the platform and its place in my portfolio, so i will cautiously grow my exposure to Lending Works over the coming months and optimistically wait to see what the future brings.

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.