The words "Future of Finance" are printed in large letters on the British Lendinvest website. In fact, this is wrong, because there are platforms for real estate loans today. Meanwhile, investors have already invested £ 290 million in mortgage backed loans through the platform launched in mid-2013. They have achieved an average return of 6.7%. In view of the interest rate environment, it is not necessary to stress that this result should have pleased investors. Swiss investors are also offered this option.
Banks are left outside
Credit platforms like Lendinvest bring property owners together with private investors. The so-called peer-to-peer lending (often abbreviated as P2P) can do without conventional banks. Financial institutions have become dispensable hinges between lenders and borrowers, a development called disintermediation.
Lendinvest claims to be the first and largest real estate platform. It lends short-term loans with terms of up to three years, the largest loan to date amounted to £ 4.1 million. The loan applications are processed online. Without the expertise of proven valuers but also Lendinvest does not come from. To provide a certain risk with a correct price tag remains manual labor. Only if one can rely on this assessment will the volume of P2P loans continue to increase as rapidly as in the past. In the UK, the most developed European market, the total volume (including unsecured consumer credit) is already estimated at over £ 2 billion. In real estate, the increasing size of P2P platforms may one day impact bank balance sheets, that is, reduce the amount of mortgage credit and savings deposits. However, this day is still a long way off, as the P2P business is still not widely used.
For both sides of advantage
What has already changed, however, is the fact that investing in mortgages for private investors today - unlike earlier - readily possible. It's also as simple as ordering a book or movie online, but it also carries the risk (financial) disappointment. The platforms do not need sophisticated, expensive distribution networks. The investor does not have to leave his house. As a rule, he only has to identify himself and transfer his investment amount, then he can decide between the investment offers from the sofa. Typical criteria are, for example, the lending value of the property, the remaining credit term and the return. Then he leans back and may look forward after some time to the periodic incoming interest and amortization payments, which he can reinvest within minutes. If even this effort is too great, it can run the (re-) investment activity on different platforms automatically.
From the point of view of a Swiss investor, however, the foreign exchange risk is considerable. After all, the Swiss market seems to be delayed, too. With Bricks & Bites the Interdiscount founder Ruedi Baer is currently launching a corresponding offer. He aims for a target return of around 6%. "That's interesting for investors," he says. By comparison, the dividend yield of listed Swiss real estate funds was 2.4% at the beginning of May 2015. In the segment of multi-family houses with a value of between 3 million and 6 million Fr., into which the funds are to flow, the competition or the demand from other actors is currently very pronounced. Abroad, in some cases significantly higher yields can be achieved. An example is the platform Mintos. It is aimed at mortgage debtors in Latvia, who are simply not too interesting for the banks, namely those who want to take out so little credit that the expense of a bank is not worthwhile. At Mintos, that's about 10 000 € on average. Thus, the platform is not in competition with the mortgage institutions, but to credit card companies and other providers of consumer credit. The average net return of 13.3% is lush from an investor perspective, especially for a loan with collateral. For debtors, the rate is still significantly lower than alternative offers. Thus, the platform is not in competition with the mortgage institutions, but to credit card companies and other providers of consumer credit. The average net return of 13.3% is lush from an investor perspective, especially for a loan with collateral. For debtors, the rate is still significantly lower than alternative offers. Thus, the platform is not in competition with the mortgage institutions, but to credit card companies and other providers of consumer credit. The average net return of 13.3% is lush from an investor perspective, especially for a loan with collateral. For debtors, the rate is still significantly lower than alternative offers.
Mintos was launched in January 2015. To date, 1180 registered investors from 26 different countries have invested € 1.6 million on the platform, including some from Switzerland. The business model is interesting in that it shows how providers in smaller markets can grow rapidly (Latvia has 2 million inhabitants). For P2P platforms, however, it is important that supply and demand grow at the same pace. If the liquidity of a platform is large enough, individual debtors and creditors quickly come into play: Lendinvest has recently completed a real estate loan of £ 700,000 in 72 hours. New small platforms can be caught in a chicken and dog dilemma if investors stay away because borrowers are missing, and vice versa. Mintos has solved the problem by pre-financing the loans itself. This guarantees a quick settlement of loan applications. Investors who join later will be able to invest in loans that already have a repayment history. At least 5% of the loan amount will remain with Mintos. As founder and CEO Martins Sulte explains, this should align the interests of the platform with those of investors. Credit growth, as it had been in the United States a few years ago, in which the credit rating deteriorated, would definitely take its toll on the platform. As founder and CEO Martins Sulte explains, this should align the interests of the platform with those of investors. Credit growth, as it had been in the United States a few years ago, in which the credit rating deteriorated, would definitely take its toll on the platform. As founder and CEO Martins Sulte explains, this should align the interests of the platform with those of investors. Credit growth, as it had been in the United States a few years ago, in which the credit rating deteriorated, would definitely take its toll on the platform.
Not all are honest
From an investor's point of view, the P2P model is subject to various risks: the danger that a debtor does not pay is only a help for broad diversification. The possibility that the operator of a platform goes bankrupt can not be ruled out, but is likely to be lower for larger and longer-established companies than for startups. Finally, it is also conceivable that a website is not a legitimate business, but is merely a fraudulent scam. In China, many investors have already fallen into such traps. By contrast, only caution, as it is advisable in all online shops helps.
Banks are left outside
Credit platforms like Lendinvest bring property owners together with private investors. The so-called peer-to-peer lending (often abbreviated as P2P) can do without conventional banks. Financial institutions have become dispensable hinges between lenders and borrowers, a development called disintermediation.
Lendinvest claims to be the first and largest real estate platform. It lends short-term loans with terms of up to three years, the largest loan to date amounted to £ 4.1 million. The loan applications are processed online. Without the expertise of proven valuers but also Lendinvest does not come from. To provide a certain risk with a correct price tag remains manual labor. Only if one can rely on this assessment will the volume of P2P loans continue to increase as rapidly as in the past. In the UK, the most developed European market, the total volume (including unsecured consumer credit) is already estimated at over £ 2 billion. In real estate, the increasing size of P2P platforms may one day impact bank balance sheets, that is, reduce the amount of mortgage credit and savings deposits. However, this day is still a long way off, as the P2P business is still not widely used.
For both sides of advantage
What has already changed, however, is the fact that investing in mortgages for private investors today - unlike earlier - readily possible. It's also as simple as ordering a book or movie online, but it also carries the risk (financial) disappointment. The platforms do not need sophisticated, expensive distribution networks. The investor does not have to leave his house. As a rule, he only has to identify himself and transfer his investment amount, then he can decide between the investment offers from the sofa. Typical criteria are, for example, the lending value of the property, the remaining credit term and the return. Then he leans back and may look forward after some time to the periodic incoming interest and amortization payments, which he can reinvest within minutes. If even this effort is too great, it can run the (re-) investment activity on different platforms automatically.
From the point of view of a Swiss investor, however, the foreign exchange risk is considerable. After all, the Swiss market seems to be delayed, too. With Bricks & Bites the Interdiscount founder Ruedi Baer is currently launching a corresponding offer. He aims for a target return of around 6%. "That's interesting for investors," he says. By comparison, the dividend yield of listed Swiss real estate funds was 2.4% at the beginning of May 2015. In the segment of multi-family houses with a value of between 3 million and 6 million Fr., into which the funds are to flow, the competition or the demand from other actors is currently very pronounced. Abroad, in some cases significantly higher yields can be achieved. An example is the platform Mintos. It is aimed at mortgage debtors in Latvia, who are simply not too interesting for the banks, namely those who want to take out so little credit that the expense of a bank is not worthwhile. At Mintos, that's about 10 000 € on average. Thus, the platform is not in competition with the mortgage institutions, but to credit card companies and other providers of consumer credit. The average net return of 13.3% is lush from an investor perspective, especially for a loan with collateral. For debtors, the rate is still significantly lower than alternative offers. Thus, the platform is not in competition with the mortgage institutions, but to credit card companies and other providers of consumer credit. The average net return of 13.3% is lush from an investor perspective, especially for a loan with collateral. For debtors, the rate is still significantly lower than alternative offers. Thus, the platform is not in competition with the mortgage institutions, but to credit card companies and other providers of consumer credit. The average net return of 13.3% is lush from an investor perspective, especially for a loan with collateral. For debtors, the rate is still significantly lower than alternative offers.
Mintos was launched in January 2015. To date, 1180 registered investors from 26 different countries have invested € 1.6 million on the platform, including some from Switzerland. The business model is interesting in that it shows how providers in smaller markets can grow rapidly (Latvia has 2 million inhabitants). For P2P platforms, however, it is important that supply and demand grow at the same pace. If the liquidity of a platform is large enough, individual debtors and creditors quickly come into play: Lendinvest has recently completed a real estate loan of £ 700,000 in 72 hours. New small platforms can be caught in a chicken and dog dilemma if investors stay away because borrowers are missing, and vice versa. Mintos has solved the problem by pre-financing the loans itself. This guarantees a quick settlement of loan applications. Investors who join later will be able to invest in loans that already have a repayment history. At least 5% of the loan amount will remain with Mintos. As founder and CEO Martins Sulte explains, this should align the interests of the platform with those of investors. Credit growth, as it had been in the United States a few years ago, in which the credit rating deteriorated, would definitely take its toll on the platform. As founder and CEO Martins Sulte explains, this should align the interests of the platform with those of investors. Credit growth, as it had been in the United States a few years ago, in which the credit rating deteriorated, would definitely take its toll on the platform. As founder and CEO Martins Sulte explains, this should align the interests of the platform with those of investors. Credit growth, as it had been in the United States a few years ago, in which the credit rating deteriorated, would definitely take its toll on the platform.
Not all are honest
From an investor's point of view, the P2P model is subject to various risks: the danger that a debtor does not pay is only a help for broad diversification. The possibility that the operator of a platform goes bankrupt can not be ruled out, but is likely to be lower for larger and longer-established companies than for startups. Finally, it is also conceivable that a website is not a legitimate business, but is merely a fraudulent scam. In China, many investors have already fallen into such traps. By contrast, only caution, as it is advisable in all online shops helps.
Hungary's currency weakness is worrying
In Hungary, the national currency forint is a topic of conversation. Last week, the forint has reached its lowest level ever against the euro. The weakness of the currency is increasingly being observed with nervousness, as recently politicians have commented. The spokesman for the government, for example, said a few days ago that the country's economic data was in order, possibly with "speculative processes" behind it. This in turn prompted the Hungarian Central Bank (MNB) to make an unusual denial.
Unperturbed looseness
At first glance, the government spokesman is right: The Hungarian economy is currently developing solidly. Economic output is expected to grow by 4% in real terms this year, with inflation still slightly below the 3% target and a clear (albeit declining) current account surplus. That should support the currency.
But Hungary is not spared the turmoil on the international financial markets, in the wake of which it is once again looking more critically at emerging markets . The tightening of monetary policy in the US, and probably soon in the euro zone, makes investments in emerging markets less attractive. In this environment, it is becoming increasingly clear that the Hungarian central bank is still pursuing an ultra-loose monetary policy.
Until recently, Budapest vowed to maintain its very low base rate of 0.9% for Hungary until 2020. In addition, unconventional easing instruments are used. However, this tastes less and less the investors, and a certain vulnerability is also seen in the considerable foreign debt of Hungary.
Analysts expect that the pressure on the Hungarian central bank to increase its traditionally very loose attitude will increase. As a precautionary measure, the monetary authorities recently emphasized that they would be ready to raise interest rates if necessary. After all, its target size - inflation - is approaching its target level recently at 2.8%.
Czech Republic shows how it works
The fact that monetary policy can be shaped quite differently is shown by the comparable Czech Republic. The central bank had followed there for a long time a loose course and until a year ago even defended a minimum exchange rate to the euro . But in view of the good economic development and rising inflation, monetary policy is now being tightened up. Last week, the Czech central bank raised interest rates for the fourth time since mid-2017. It is thus playing a pioneering role in Europe. In Hungary, on the other hand, it is likely to be debating the weakness of the forint for a while.
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