No Development. No Bridging. No Commercial.
Unlike other P2P property finance platforms we do not provide higher‐risk loans for development, bridging or commercial purposes. Landbay takes a conservative approach to risk, which is why our rates are lower than some of our competitors.
Traditional buy‐to‐let is Resilient
UK buy‐to‐let, as an asset class, has historically been very resilient. In 2013 the mortgage default rate was just 0.09%, being less than one property per 1,000. At the peak of the 2008 Global Financial Crisis the BTL default rate was 0.35% (source: Council of Mortgage Lenders, 2008 and 2013).
Once lent, your funds are always secured by first‐ranking mortgages over tenanted residential property, typically to a gearing level of less than 70% (the loan‐to‐value ratio). All properties are independently valued under a unique two‐step process by our panel of RICS valuers.
Cashflow and Affordability
All loans are rigorously assessed in terms of affordability and rental income. Rental income must be at least 125% of the mortgage repayment and borrowers must earn at least £30,000 pa. We believe that the single biggest factor in ensuring a mortgage is repaid is cash flow (although our fallback position is of course repossession of the property).
The funds you invest will be diversified across multiple mortgages to minimise the effects of any losses incurred by defaults.
Landbay Provisioning – The Reserve Fund
We operate a provision fund, The Landbay Reserve Fund, to help offset potential defaults and arrears. Landbay operates the Fund on a discretionary basis and does not guarantee that any claim will be approved, nor that there will be sufficient funds available.
Segregation of Client Funds
All unlent funds are held in segregated client accounts with both Natwest and Barclays PLC.