Ultimately the risk lies in the borrower not being able to make repayments and a default occurring.
Depending on the case, Landbay can step in and become receiver of rent for the property. This means that Landbay would appoint a letting agent to manage the property, and continue to service the loan from rental income, which would then be passed on to the investors in the loan as normal.
If the market conditions are suitable, Landbay’s Security Trustee will make a decision on whether to enforce a repossession of the property to recover the capital and missed interest payments, on behalf of the mortgagee (i.e. the investors).
If this capital (minus costs incurred by the above processes) is not adequate to cover the full repayment of the loan to investors, the Landbay Reserve Fund can be called upon, on a discretionary basis. For more information on the Reserve Fund, please click here.
All Landbay lending is secured against British residential property, thus a borrower’s ability to repay a loan may be affected if there is a material downturn in the UK Private Rented Sector. Landbay loans are secured by tenanted/income‐producing residential properties (no development, no bridging, no commercial), to a maximum Loan-to-Value of 80%. Investors' funds are always diversified across multiple properties located in different parts of the country.
Landbay Platform Failure:
Should Landbay cease to trade, all loans would continue to be managed through to repayment with minimal disruption by our Security Trustee and a third‐party Loan Administration provider. All loan contracts are direct between a borrower and a lender and the security is held in trust by the Security Trustee.
Any unlent funds in your investment account are held in RBS and Barclays PLC Segregated Client Accounts which are FSCS protected up to £75,000.
For more details please read our full Risk Statement.