Landbay Investment Review
Despite only starting in 2014, Landbay has firmly established itself as one of the leaders in property-based lending within the peer-to-peer lending (P2P) market.
It is the only peer-to-peer lender in the UK focused exclusively on residential buy-to-let mortgages and, in a little over two years, it has lent more than £42million in loans. Landbay offers investors investments secured by property owned by experienced landlords.
By publishing its full stress tested loan book, Landbay has become a firm adopter of transparency in the P2P lending industry and the platform also has the impressive accolade of never having had a single default on any of the 243 loans it has facilitated.
The relative stability of the underlying assets, however, mean Landbay's rates of return are on the lower end of the P2P spectrum - between 4 and 5% across two products, Fixed and Tracker Rate Mortgages. Here well evaluate the products Landbay offers, helping you get comfortable with the returns, security, benefits and risks of investing.
*P2P lending is not a savings product, your capital is not protected by the Financial Services Compensation Scheme and there is a risk you could lose money.
Libor Tracker: 3.95% p.a.
Fixed Rate: 4.47% p.a.
Historic Default Rate: 0%
Historic Loss Rate: 0%
Estimated Loss Rate (2016): 0.10%
Total Lend Funds To-date: £42.94m
Landbay offers investors buy-to-let mortgage loans, secured on income-producing residential properties owned by experienced landlords.
Loan values are estimated on a case-by-case basis, however they can range anywhere from £100 - £30,000.
The Tracker product has no fixed term and funds can be withdrawn quickly, dependent on a new investor buying the corresponding amount.The Fixed product has a term of 3 years.
Landbay investments are auto-diversified in order to mitigate risk of a default affecting your overall investment. The platform secures investments with two primary measures in order to protect your capital - a provision fund and asset security.In addition to these security measures, Landbay was also on of the first P2P platforms to be independently stress tested to assess it's capabilities in the case of an economic downturn - much like the 2008 housing market crash.
Landbay does not actually publish the exact amount contained in its provision fund, however it does list its current value in relation to the amount of outstanding peer-to-peer loans. Currently, this sits at 0.6% of loans on their books. It is important to look at this figure beside the platform's estimated future defaults, which, due to the fairly reliable nature of the loans listed, sits at 0.1%.
Landbay reserves the right to take over the rental process should the borrower fail to make a repayment and can also liquidate any assets to cover any lost funds. As mentioned previously, all underlying assets behind Landbay's listed buy-to-let loans are, on average, valued at 133% of the loan amount. It has an average LTV rate of 65%. The platform has a robust underwriting process coupled with an independent team of property valuation experts, ensuring that each property and, in turn, LTV rate, is calculated accurately.
Due to the buy-to-let market being fairly solid and reliable today, investing through Landbay is considered to be one of the safer P2P platforms to invest across.
Landbay's stringent borrower vetting and underwriting processes are reflected in its 0% default rate and extremely low expected loss rate.Providing an investor(s) is available and willing to buy you out of your investment, you can gain access to your money early, should you require it, however there are no guarantees. Landbay also offers one of the more straightforward and easy-to-use online interfaces compare to ther P2P lending websites, with a clear and concise dashboard and swift investing process.
Given that Landbay's buy-to-let loan listings come with greater security, this is reflected in the returns on offer. Landbay generally offers slightly lower rates than many other major P2P platforms.Landbay specialises exclusively in buy-to-let mortgage loans, so there is no sector diversification when it comes to investing. Some other platforms have the ability to spread your capital across a range of markets, such as property or SME businesses, providing exposure to a more diverse range of investments.
Although interest rates between 4 and 5% may not seem as lucrative as some other investments in P2P lending, Landbay offers robust and reliable security measures to protect your investment.Landbay has also been an industry leader in transparency, publishing its full loan book to ensure you know exactly how Landbay intends on standing the test of an economic downturn.However, like all other P2P investments, lending with Landbay does not come without risks and is not covered by the FSCS there is always the danger you could lose your capital.