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.

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.