P2P Questions and Observations

dont_use_vistaprint

I have been investing in P2P just over three years , more recently the bulk of it held with Funding Circle within an IF-ISA

At first I was getting great returns flipping loans, I could sell 3-5K of loans in hours after the first few payments and overall making 8-12% with no losses at all.

As time has gone by its become harder to sell and of course defaults only occur after the first 6 or so payments not at first. Some of these loans I cant sell and FC takes a long time to declare a default so they run over two tax years.

Other platforms don't offer the sell options, I have a few losses but still 7.9% after losses and fees for the IF-ISA , 7.5% (before tax) on the non-ISA and averaging 5.6% (before tax) on others outside of FC after fees/losses.

But I'm staring to worry with the SME sector particularly UK/Western Europe.

Is it time to get out of P2P ?

AnotherJoe

I would say so, judging by the posts on here about how difficult it is to get out and the lengthening time to sell on loans.

I missed the boat and certainly wouldnt be buying in now.

masonic

Confidence in P2P seems to be at an all time low currently.

I hold P2P loans that have been technically in default for over a year, but have still not been formally defaulted. I have one loan that was formally defaulted over 3 years ago and recovery action is still in progress, yet has so far yielded nothing. This is the sort of practice that leads to consumers being misled about default rates and makes it very hard for anyone to know what return they might expect.

Defaults tend to accumulate in people's portfolios and makes it difficult for P2P platforms to launch new loans as increasing amounts of investor capital gets locked up and they spend increasing amounts of time managing overdue and default loans.

The greater fools who used to buy up loans nearing maturity are wising up, so loan flippers such as yourself are having a harder time.

I've not completely exited P2P, but I'm even more selective nowadays, have halved my exposure and could cut it further.

Thrugelmir

dont_use_vistaprint wrote: »

At first I was getting great returns flipping loans,

Markets rely on liquidity. Once liquidity dries up then patience will be required. Investing isn't about playing a roulette wheel. If you aren't in for the long term. Then get out of the market entirely. Better places to speculate if that's what you are after.

Alexland

We did some P2P for signup bonuses but are completely out now as the normal level of reward isn't high enough to cover the risk. P2P isn't accessible enough to be used as cash savings and S&S, even at current valuations, is more attractive for long term.

aroominyork

I am also pulling out of p2p. The only product I like - though I probably couldn’t justify this if cross-examined - is the one year Ratesetter market, but rates have fallen and if I cannot renew at 5.5% when my investment matures (and hopefully pays back) in January I will probably move that outside p2p. My last Assetz Capital funds, in the 30 day notice market, are released this week and then I will wait for my raft of Funding Circle defaults to pay me back a bit here and there.

dont_use_vistaprint

aroominyork wrote: »

I will wait for my raft of Funding Circle defaults to pay me back a bit here and there.

I just check weekly now and if its a good week theres £50 or so to withdraw. The sell button seems to simply not work anymore!

dont_use_vistaprint

Thrugelmir wrote: »

Markets rely on liquidity. Once liquidity dries up then patience will be required. Investing isn't about playing a roulette wheel. If you aren't in for the long term. Then get out of the market entirely. Better places to speculate if that's what you are after.

It actually worked very well for a while, I don't think its a good idea to be in p2p long term, its not about patience, defaulted loans don't just bounce back up eventually like low valued stock portfolios, they simply fail. SME's don't survive bad times like PLC's do

Thrugelmir

dont_use_vistaprint wrote: »

It actually worked very well for a while, I don't think its a good idea to be in p2p long term, its not about patience, defaulted loans don't just bounce back up eventually like low valued stock portfolios, they simply fail. SME's don't survive bad times like PLC's do

Direct loans are long term. Totally different investment to say shares. Likewise as investments uncorrelated to shares. The interest rates on offer reflect the risk of lending to SME's. If you don't understand what you are investing in then don't.

quirkydeptless

aroominyork wrote: »

I am also pulling out of p2p. The only product I like - though I probably couldn’t justify this if cross-examined - is the one year Ratesetter market, but rates have fallen and if I cannot renew at 5.5% when my investment matures (and hopefully pays back) in January I will probably move that outside p2p. My last Assetz Capital funds, in the 30 day notice market, are released this week and then I will wait for my raft of Funding Circle defaults to pay me back a bit here and there.

I have only been in P2P for the sign up deals.

I've been contemplating £5000 in Assetz Capital for the £150 sign up bonus (offer ends 30th September).

What was your experience like with them?

Albermarle

I've been contemplating £5000 in Assetz Capital for the £150 sign up bonus (offer ends 30th September)

They appear to be one of the more solid ones, partly reflected by the more realistic interest rates on offer. The info and the follow up on the loans seems good, probably because they are active in the property business apart from P2P.

They do not seem to have gone down the same path as