ASSETZ Capital is officially launching its new property-secured investment account on Wednesday, tapping into growing demand from its more cautious investors.
The account is the first of two new products the peer-to-peer business lending platform will add to its range, as reported exclusively by Peer2Peer Finance News in April.The other new offering will be a longer-term account which is yet to launch.
It will yield 5.5 per cent per year on loans secured against land or property with a value that “substantially exceeds” the value of the loan itself, the firm said.
Maximum loan-to-value (LTV) ratios will vary upon the type of loan, but will be set at a level where the expected capital loss in the case of a default on that loan is zero, it added.
“Historically, property-backed investments have offered sound protection for lenders, even in difficult economic environments,” said Assetz Capital’s chief executive Stuart Law.
“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 LTV 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.
“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.”
Investment into the new account will have the added protection of a provision fund and loans will be tradable on Assetz Capital’s secondary market without additional fees. The account will be eligible for the Innovative Finance ISA that the firm plans to launch once it receives regulatory authorisation.