New account has a capped target return of 5.50% gross per annum.
P2P lender Assetz Capital has announced a new investment account, or “Property Secured Investment Account,” that is designed to allow individuals to invest automatically in property-backed loans. Assetz Capital said these loans will “always take land or property security that substantially exceeds the loan value”.
All loans must pass through Assetz Capital’s credit checks that assess loan affordability and likelihood of the loan being repaid at the end of the term. The max loan-to-value ratio for individual loans eligible for automatic selection for this specific account depends upon the type of loan.
The new PSIA has a target rate of 5.50% gross per annum interest and is said to benef from the added protection of a discretionary Provision Fund. Investors may automatically invest any sum upwards from £1 in a diversified portfolio of secured business loans that have passed Assetz Capital’s checks. Additionally, there is no fee associated with selling the loan on the Assetz Capital secondary market. The PSIA will also be eligible for the IF ISA once Assetz Capital has been given full approval to offer an ISA solution.
“Historically, property backed investments have offered sound protection for lenders, even in difficult economic environments. We have always based our business on secured lending with property, which is the most common asset registered by borrowers. Nonetheless there is a further level of security that can be achieved by limiting the Loan to Value to levels where expected losses on each particular loan are zero. Unlike most other assets, property can also increase in value, which can actually make the loan more secure as time goes by,” commented Stuart Law, CEO of Assetz Capital. “The new Property Secured Investment Account is designed for investors that want that extra level of security on their investments, although we always point out that capital is at risk. We predict this will swiftly become one of our most popular accounts – it’s something our more cautious investors have been requesting for a while.”
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