An important update regarding the Access Accounts- Nov 22
28th November 2022
Over the last year we have finally seen substantial rises in bank interest rates after well over ten years of them languishing at near zero levels. This has led to the Access Accounts becoming less competitive than they were versus rates offered for some bank savings products.
We recently raised the rates on the Access Accounts and saw healthy net inflows of capital for a period. However, after continued interest rate rises, the Access Accounts are not now attracting further new capital on a net weekly basis, and we instead are seeing modest net outflows.
If this was allowed to continue, then existing loans within the accounts that had future funding commitments, such as development loans with monthly draw down requirements, may not be in a position to be funded. The accounts have to be able to service future funding requirements of existing development loans as a development can lose substantial value if funding ceases mid-development and this is something we always seek to avoid as investors, as well as borrowers, would often see material losses as a result. In order to avoid that situation, we have taken the difficult decision to start to carefully manage withdrawals from the Access Accounts to prioritise all existing development loans being fully funded to completion. We have now entered Non-Normal Market Conditions as defined here. These changes to withdrawals are envisaged under and described in our terms and conditions and the published account operation rules.
As at 28th November 2022, withdrawal requests from the Access Accounts will need to be matched to new investment coming into the account. This means that if, for example, a new investor wished to invest £1,000 into the Access Accounts, they would replace the next queued investor/s wishing to withdraw £1,000. This matching will be applied at the time of a withdrawal request being ready to be processed, so after any notice period required for the 30 Day and 90 Day accounts. A queue of withdrawal requests will be in operation, sorted by date of request plus any notice requirement. For example, a Quick Access Account withdrawal request would be immediately added to the back of the queue and a 90 Day Access Account would be added to the back of the queue 90 days after the withdrawal request.
This matched withdrawal and investment process will continue until such time as all of the loans that Access Account investors hold within those accounts, and that have future funding requirements, are fully funded. After that time, withdrawals will move to being funded by both new investment and also ongoing loan redemptions and repayments. We expect that to happen in around 12 months’ time unless circumstances change.
No new loans will be funded by the Access Accounts whilst we are in these Non-Normal Market Conditions in order to speed the withdrawal process.
To read more about what this means please visit our website.
If you have any questions or queries, please call our Investor Team on 0800 470 0430 (Option 1), contact us via Live Chat on our website, or email enquiries@assetzcapital.co.uk
- November 28, 2022