Over the past six months or so we have been monitoring the market in terms of rates being offered, and have seen a slow trend downward. In order to provide a strong loan flow and accommodate our investors appetite for choice, we have been offering varying interest rates based on a risk-adjusted basics. This has been adjusted on a multitude of factors including LTV, location, borrower history, exit strategy and probable demand.
By offering varying interest rates may satisfy investors who wish to invest in more secure loans. The reduction in some loans should result in more loans coming through the pipeline. This will result in more investment funds being deployed more of the time leading to an overall increase in earnings
The lower rates available on P2P property loans seem to reflect the longer-term trend of falling interest rates on commercial loans in the UK.
Market forces are highly influencing the falling interest rates, which will in turn have an affect on the higher interest rates the P2P property loans are currently offering.
Whilst the interest rate environment continues to shift we will continue to hunt out what we see as the best balance or risk and reward in the bridging and development loans market.