Assetz Capital has processed approximately 4,000 trades worth around £6m on its new access account marketplace, just two weeks after launching the product.
The marketplace was intended to make it easier for investors to make withdrawals by allowing users to sell loans at a discount.
Since the marketplace was launched, there has been a “substantial drop in the number of people looking to withdraw capital”, said Assetz, with a £10m reduction in the queue.
The platform added that only around two per cent of investors have sold their loans at a discount to date, while another two per cent are seeking to sell at a discount. This suggests that most investors have chosen to cancel their withdrawals or wait until loan redemptions repay them over time with no discount necessary.
“It is good that people now have another way to withdraw capital from their loan investments and we expect discounts to remain for a while whilst the impact of the virus on the UK economy remains uncertain and people want to rebalance some of their investments to cash,” said Stuart Law, chief executive at Assetz Capital.
“Nonetheless the number of people and amount of money looking to be withdrawn seems to be falling very quickly and the withdrawal queue is down some £10m since two weeks ago as a result of many people cancelling withdrawal requests and others selling at a discount.
“The ability to come into the access accounts with a discount provides an even greater incentive to join our investors supporting the UK economy and earning fair rates of interest.”
Assetz Capital’s access accounts are currently targeting rates of between 3.75 per cent and 4.1 per cent, per annum. Law added that he hopes to welcome more investors to the platform this year, as bank rates stagnate and the possibility of negative interest rates grows.
“The more important point, looking forwards, is what will income-starved investors do next as interest rates fall further – negative rates are talked about arriving in the winter – and shares continue to see dividends slashed.
“The choice ahead for investors seems stark, choose speculations with no income like gold, choose the rollercoaster of the stock market with potentially reduced dividends, move to cash in a bank or under the mattress if rates go negative, or look for one of the few remaining income-producing investments that supports the real economy and jobs.
“We feel that investments such as ours will continue to have a growing share of investors’ capital over coming years.”