LIBOR is the benchmark for most mortgages ‒ most banks and lenders use it and it is the market rate for institutional lending. At Landbay, our Tracker Rate mortgages and the investment products for these loans are pegged to LIBOR. As Landbay grows we are increasingly presented with interest from institutional investors who are looking to invest via our platform alongside our retail customers. Institutional interest in Landbay is strong vindication of our prudent underwriting standards (and a fully‐performing loan book that has seen no late payments since we started lending in 2014). This is positive for our retail customers as increased investment flows will increase diversification and liquidity on the platform.
We believe that LIBOR better prices liquidity in the market. In 2007, as we entered the credit crisis, Bank Base Rate fell sharply but LIBOR increased significantly; representing the illiquidity in the market. At this time, investments tracking BBR would have seen their interest payments fall whilst investments tracking LIBOR would have seen their interest payments rise. A rate that better prices liquidity can improve secondary market liquidity which subsequently facilitates investors’ ability to withdraw their investments before an investment’s term. We see this shift as a natural evolution in peer‐to‐peer lending and we are proud to be leading the way, as we did in setting industry standards in transparency and independent stress testing.