Assetz Capital has launched the Property Secured Investment Account (PSIA), with Provision Fund, which becomes the fifth specialist investment account available to investors on the platform.
The new account allows investors to invest automatically in property-backed loans that always take land or property security that substantially exceeds the loan value. All loans have also passed Assetz Capital’s credit checks that assess loan affordability and likelihood of the loan being repaid at the end of the term.
The maximum loan-to-value ratio for individual loans eligible for automatic selection for this account depends upon the type of loan but in all cases is set at a level where the expected capital loss in the case of a default on that loan is zero.
The new PSIA has a target rate of 5.50% gross per annum loan interest whilst also benefiting from the added protection of a discretionary Provision Fund. Investors can automatically invest any sum upwards of £1 in a diverse portfolio of secured business loans that have passed Assetz Capital’s strict credit checks.
Unlike some other P2P platforms, there is currently no fee for selling loans on the secondary market, subject to demand from other investors. The account will also be eligible for the IF ISA once Assetz Capital has been given full approval to offer an ISA solution. All Assetz Capital investments can be made and managed through Assetz Capital’s members’ portal.
Stuart Law, CEO at Assetz Capital, said: “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. 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.”