@NSS raises a good point: size matters

[ToughButterCup]

On this thread  @NSS makes the point that maybe we are as yet too small a group of people  to consider operating this model to help our members.

 

What would the critical membership size be to make it work? 

Is there a critical mass of money that we'd need to be taken seriously as P2P lenders? @SteamyTea has just posted that he'd need £100K  he also asks if anyone has experience of Zopa

Could we support a loan of that amount?

[SteamyTea]

No

@JSHarris posted a while back that to be taken seriously you need £100k.

I just relayed the message.

 

All I can say is what are the opportunity costs.

For £100k we could set up a consultancy, a timber frame house factory or buy a tropical island and be done with planning laws

[ToughButterCup]

4 minutes ago, SteamyTea said:

No

@JSHarris posted a while back that to be taken seriously you need £100k.

[...]

Hmm. Was that on ebuild? Here?

 

There , J mentions that he  was looking for £100k, not that a lender (or group of lenders) needed to have £100k available.

[SteamyTea]

Yes

Jeremy can reread it now.

 

I have not misbehaved enough to be excluded from a website yet. 

Edited December 1, 2017 by SteamyTea

[Ferdinand]

22 minutes ago, recoveringacademic said:

Hmm. Was that on ebuild? Here?

 

There , J mentions that he  was looking for £100k, not that a lender (or group of lenders) needed to have £100k available.

 

I think that depends what you are funding.

 

If it is the funding of an entire build, then it would be much more than 100k.

 

If it was setting up a Credit Union, then it would be much more and take several years with regulatory hoops.

 

But that is perhaps a different fish-kettle to helping people who have hit a financial brick wall or quagmire half-way through a build, where the numbers might be "25k to get us in to save 2 years more rent or caravan freezing".

 

One other option (losing track of threads here) would be to ask Folk2Folk to do a la carte deals case by case - we know that they lend for self-build. Say "We have *this* project, and *these* investors" - will you do the admin via your normal processes for your normal fees at X rate of interest?". One advantage is that they are structured to let the investors have it in an ISA wrapper. One disadvantage is that they start with investments of 20k+.

 

But perhaps we need to try different mechanisms in the early stages, and may actually be a catalyst for other people to widen the range of market options for different circumstances. If we create things we do not end up running, that is surely a good thing and a win-win?

 

 

Edited December 1, 2017 by Ferdinand

[Jeremy Harris]

16 minutes ago, SteamyTea said:

Yes

Jeremy can reread it now.

 

I have not misbehaved enough to be excluded from a website yet. 

 

When some people take a dislike to me, for whatever reason, it seems they can go to extraordinary lengths.  The extreme animal rights vitriol that I got from a supposedly anonymous source (who forgot to hide her IP address and email server details............) was a good example.  Must have taken her hours to get that worked up and full of hatred to go to such lengths, for several days.  The daft thing was that I was every bit as much in favour of protecting animal rights as she was.

[ToughButterCup]

18 minutes ago, Ferdinand said:

[...]

But that is perhaps a different fish-kettle to helping people who have hit a financial brick wall or quagmire half-way through a build, where the numbers might be "25k to get us in to save 2 years more rent or caravan freezing".

[...]

 

Its no secret that we have hit such a rock. And privately I have been told of others. @ProDave makes no secret of the delights of caravan living either.

 

I'm not sure yet how much we'll need, but I soon will know. It will certainly be less than £100k (If it's more she's in trouble).

In thinking about P2P lending, it'll be sensible for us all to start small anyway.  

 

Thanks for the reference to folk2folk: (here). Makes interesting reading

[Ferdinand]

11 hours ago, recoveringacademic said:

 

Its no secret that we have hit such a rock. And privately I have been told of others. @ProDave makes no secret of the delights of caravan living either.

 

I'm not sure yet how much we'll need, but I soon will know. It will certainly be less than £100k (If it's more she's in trouble).

In thinking about P2P lending, it'll be sensible for us all to start small anyway.  

 

Thanks for the reference to folk2folk: (here). Makes interesting reading

 

If you missed it, @Grosey used them to finance his build.

 

One thing that could make Folk2Folk suitable for a "Pilot" is that they can - I *think* - take ISA transfers in. From the investor side even though unregulated it is quite well protected because they secure on a property at a less than 50% exposure ratio. It also mitigates one aspect of the F2F model, because I think your money sits on its bottom doing nothing until a loan request comes in.

 

OTOH, getting into a newbuild a year or more earlier could save 10s of £k where the loan costs could be <£5k.

 

But for many people there are cheaper options available than Folk2Folk, such as mortgages or zero interest cards or maybe even the best personal loans (eg banks currently down to ~3.0%). At F2F you will be paying around 6% plus fees, so the flexibility has to be worth it. But that is also less than half the interest rate of bridging finance, and you get more flexibility.

 

I wonder if there would be scope to ask for a slightly lower rate of interest, if both sides requested it.

 

 

Edited December 2, 2017 by Ferdinand

[Grosey]

Got stacks of F2F paperwork here if anyone wants to know something specific I can try and help out. 

 

When I discussed using F2F with my solicitor his first response was “give me a couple of days to speak to some other clients, I may be able to find you a better rate than F2F” he was essentially asking some of his other wealthier clients if they’d like to loan me the money - all drawn up through him.  Apparently a reasonably common practice in farming / estate law. 

 

I once looked at buying buying a barn conversion off my uncle, and was looking at a form of private mortgage / rent to buy scheme between he and I. I discussed this with the same solicitor and he said it would be very easily done, I just agree terms with my uncle, then a charge is placed on the land registry title that Mr Smith is entitled to £xxx or owns a share in this property until the debt is repaid or something along those lines (lawyer speak). 

 

Similar in a a way I suppose to a standard mortgage, you can’t sell the house without paying back whoever you have borrowed from. 

 

Thats is a very basic of my understanding of it anyway, over to the many here that are more intelligent than I!

[TerryE]

13 hours ago, JSHarris said:

When some people take a dislike to me, for whatever reason, it seems they can go to extraordinary lengths. 

 

I knew that I should have given you a Greek-style kiss and hug at our meet up, but I was worried that you might have a heart attack and die on the spot.

[Nickfromwales]

17 hours ago, SteamyTea said:

I have not misbehaved enough to be excluded from a website yet. 

I bought a 7-shooter especially, you've got one round left

 

[SteamyTea]

I shall make it count then