Somo boosts rates to 12pc ahead of 10-year anniversary
Bridging lender Somo has boosted its upper rates to 12 per cent for at least another month, ahead of the platform’s 10th anniversary next year.
Investors were previously earning up to 11.5 per cent, after Somo hiked rates by one per cent during the month of July.
The lender said that the higher investor returns will be covered by higher borrower rates, but added that there is little risk of the higher rates leading to higher defaults.
Since its launch in 2014, Somo has delivered an average annual return of 10.8 per cent per annum.
“We’ve had success this summer with trialling higher borrowing costs, and we’ve been quick off the mark to pass these increased rates of return to our investors,” said Louis Alexander (pictured), founder and chief executive of Somo.
Read more: Somo posts rise in profits and turnover as it expands business
“We’ve already locked in this 12 per cent rate for a number of investors and they can rest assured that if the Bank of England reduces rates over the next 12 months, their rates remain fixed with us. We’re committed to hold this rate for new investments throughout September.
“We believe some banks and lending firms have been too slow to pass these higher rates on to their customers. Now is the time for investors to seek out the most profitable deals.
“The alternative lending sector is a very attractive place for investors right now and we’re proud to offer some of the highest rates of return across the property lending sector.”
Next year Somo will celebrate its 10th anniversary. It has lent almost £300m to date with no capital losses to investors.
Alexander noted that the company is operationally strong and has gone “from strength to strength in terms of profitability”.
Read more: Somo bolsters team with relationship director and two underwriters