Collateral UK – An Introduction

Introduction

Collateral UK was incorporated in 2014 to offer a peer-to-peer platform to investors interested in investing in the UK property market. It specialises in short-term asset backed bridging loans. Usually but not always the investment opportunities are based around purchasing new build properties from the developer, with investments repaid when a customer or tenant is found for the property. Typical terms are 90 to 180 days. The advertised ROI is 12% but this can vary across specific loan requests. Collateral UK also offer a secondary market allowing investors the opportunity to exit early if they feel the need to.

There is no minimum deposit or minimum investment on the Collateral UK platform. This platform only currently accepts bank transfers, it does not accept card payments.

Available Loans Page

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Image shows Collateral UK loan request page (with the property identity column removed).

The top row of the table (below the title row) shows the grand totals for all currently available loans. There are more rows on the platform than shown in this image so the totals look inaccurate but they are not.

 

Asset Value – shows the market value of the property requesting the loan.

Loan – is the value of the loan being requested on the assigned property.

% PA – displays the percentage ROI offered for each loan request.

LTV – shows the loan to value against the market value of the property. Collateral UK offer up to a maximum of 70% LTV against any property.

Available – is the current value of loan available for investment. If a loan is fully funded it is removed from this table until value becomes available again though an investor selling their loan part on the secondary market place.

Invested – Shows how much you currently have invested in to each loan request.

Remaining – displays the remaining time left on the loan term before expected repayment, in days.

Funded loans page

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The image shows the Loans Funded Page for Collateral UK (with the loan identity column removed).

 

Age – the number of days you have been invested in each loan request.

Amount – shows how much you currently have invested in each loan request.

Start – is the date you invested in the loan request.

LTV – shows the loan to value against the market value of the property. Collateral UK offer up to a maximum of 70% LTV against any property.

Remaining – displays the remaining time left on the loan term before expected repayment, in days.

Interest – shows how much interest has been accrued for each loan request to date. Interest is paid to the platform account at the end of each month.

Sell – is the option to sell the loan part on the secondary market.

Renew – sometimes a borrower may request a loan extension or a loan renewal. This option allows your investment to be automatically rolled over to the new loan request.

Landbay – An Introduction

Introduction

Landbay is a peer-to-peer lending platform specialising in the UK buy to let property mortgage market. Landbay was established in 2013 in response to the resilience in the UK buy to let market thought the 2008 downturn despite property values dropping by 17%.

Investments on this platform are initially queued to await assignment to a suitable investment. However interest is paid on deposits (this has currently been suspended as of April 2017 due to excessive demand) even while in the investment que. Loan terms can be for as longs as 10 years on this platform.

Landbay’s minimum account deposit is £100 which can be invested in one of two options. Land Bay also operates a secondary market for an early investor exit option. You are also able to ‘Auto Invest’ interest earned to maximise returns.

The options LandBay currently offer

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Investment options available on the LandBay platform.

Options are either a fixed rate of 3.69% ROI fixed for 5 years. Or at a tracker rate of 3.00% (plus LIBOR) ROI (Correct of April 2017).

 

The LandBay account dashboard

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The Landbay account dashboard

The dashboard is very simple for Landbay –

Cash balance – shows any funds on the platform that are not currently invested or queued for investment. You are free to withdraw any funds at any time in the cash balance.

Invested funds – this shows all your invested funds assigned to loan parts. It also shows funds that are queued and awaiting assignment to loan parts. There is currently an estimated 2 month waiting list for loan assignment (correct as of April 2017) due to excessive demand.

Lifetime Interest – shows the total earned interest over the life of the account. This is also where you can access your statements.

With investments still queued for investment information on this platform will remain sparse, but more information will be added once the investments become active.

 

 

Funding Circle – An Introduction

Introduction

Funding Circle is a peer-to-peer lending platform, who established its UK operations in 2010, although it operates in 4 countries worldwide. The Funding Circle platform offers finance to a number of areas including property investment, business growth and expansion, working capital loans and commercial property development.

Funding Circle has an advertised average return of 6.5% ROI after bad debts and charges. This platform also operates a secondary market allowing investors to sell loan parts before term if an investor feels they need to exit a particular investment. Secondary loan part sales are subject to buyers being available in the market at the time, so this offers no guarantees of succesful loan part sales when an investor may need them.

The minimum account deposit for Funding Circle is £100 and the minimum loan part value you able to purchase is £20. Loan terms are usually between 6 months and 5 years. The platform charges investors in two areas, a 1% (of the loan part value) annual service charge and a 0.25% transaction charge when selling loan parts on the secondary market.

The summary account page.

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Image shows the Funding Circle account summary page.

This is what the main account summary page looks like for Funding Circle. It’s very straight forward to understand. The top left box shows your totals in percentages –

Gross yield – refers to your average maximum advertised return across all your current invested loan parts.

Annualised Return – this is your actual annual ROI on all current invested loan parts added to your completed investments in the financial year. The figure also subtracts Funding Circle transaction fees and bad debts incurred.

Estimated fully diversified return – this is your estimated return over all current loan part investments, subtracting Funding Circle transaction fees and bad debts.

The bottom left box shows your all time earnings summary –

Earnings – shows your total paid (interest is only paid the end of each month) return over the life time of the account (note: this is a grand total and is not broken down in to tax years, you will need to either work that out yourself when it comes time to pay your taxes, or a separate tax statement is available to account holders). Earnings are broken down in to four categories, interest, loan part sales, loan part purchases and promotions. These can been seen by clicking the ‘blue plus’ button next to ‘earnings’.

Fees – are Funding Circle’s annual service charge incurred. The service charge is set at 1% of the value of the loan part calculated over an annual term. In addition Funding circle also charge a transaction fee of 0.25% of the loan part value when selling loans on the secondary market.

Losses – show any bad debts you may have occurred. Losses are also broken down in to bad debts minus recoveries of the bad debt, this can be seen by clicking the ‘blue plus’ button next to ‘losses’.

Net earnings – is the sum of your earnings minus fees and losses.

The box on the right of the screen shows your funds summary –

Funding Circle total – is you total account balance on the Funding Circle platform. This includes any loan parts you are invested in as well as any balance you currently do not have invested in any loan parts.

Accrued interest – is any interest gained by your investments that has not yet been paid in to your account balance (accrued interest can not be withdrawn from the platform until it is paid at the end of the month).

The pie chart– is made up of 3 components; the blue section shows any funds put to a loan part but not yet accepted by the borrower; the green shows any funds accepted and is actively attributed to loan parts. There is also a grey section showing any funds on the account platform that are ‘idle’ or unassigned, this includes interest paid at the end of each month.

The loan request page.

The table below shows the format of the loan requests page (excluding the loan identity column).

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Image shows the Funding Circle loan request page (excluding the loan identity column).

Risk – Funding Circle breaks down it’s loan risk assessment in to categories as from A+ being the lowest risk and lowest interest rate, through to E being the highest risk and highest interest.

Amount – shows the total value of the loan request.

Term – is the agreed loan term between Funding Circle and borrower show in months. This term is typically between 6 and 60 months.

Rate – shows the top line annal ROI as a percentage offered by the specific loan request, excluding estimated bad debt and applicable charges.

Funded – is the percentage amount the loan has currently been funded to on the platform.

Time Left – shows the amount of time the loan will remain on the market place in its initial offering. This is typically for 7 days.

PropTechFish, the mission ?

Featured

So what is the mission of PropTech Fish ? Well quite simply its a blog designed to assess various investment platform’s for the small time investor (the fish). The limitations of a fish investor for the purpose of this blog is and individual who has £100 or less a month to invest. The blog will report back regularly on the progress of various platforms, as well as provide wider UK property market information.

Any information provided with in the blog should only be treated as a record of the authors own personal experience and provides no guarantees that a reader would experience the same outcomes. If you choose to invest in a platform, it is with your money and the risk is yours entirely.

The author of this blog has no preference with any platform discussed, with the intention being to provide an objective and honest assessment of the various platforms the UK market has to offer.

Finally read as much as you can before parting with any money and of course have fun investing !

What is PropTech ?

PropTech is short for Property Technology. This term casts a wide net over a number of areas but can defined by any technology developed to assist in the purchase, leasing or marketing of property. With-in the PropTech sector a number of platforms have sprung up in recent years allowing the small fish investor (like me) to easily invest small amounts in property transactions in exchange for a reasonable return. We all know UK banks are currently delivering pitiful returns on savings accounts at this time so its good to know there are alternatives.

Of course its has to be said any money invested in these platforms is at risk like any other investment, so be aware you can walk away with less than you started with if a borrower hits choppy waters and starts to default on repayments. I would suggest reading as much as possible on your chosen platform and more generally about the sector so your eyes are open before making any commitments.