Landbay: Peer-to-Peer Lending and Borrowing

Can the property-backed peer-to-peer lending platform provide the right service for you?

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Landbay gives both investors and borrowers the opportunity to benefit from the British property market, either through investment or direct ownership. The platform connects people applying for a buy-to-let mortgage to investors, and means all loans are secured by real-estate.

Landbay has been successful so far and in 2015 was voted as one of the most disruptive start-ups in the UK.

Continue reading to find out more about the peer-to-peer lending platform.

Who is Landbay?

Landbay was founded in 2013 by economist John Goodall and property finance analyst Gray Stern. Since its inception it has had a very promising start, and as of 2015 Landbay was the fastest growing peer-to-peer platform in the UK.

Landbay is a member of the P2P Finance Association and the Council of Mortgage Lenders. The company is also authorised and regulated by the Financial Conduct Authority.

warning iconWarning: The value of investments can go down as well as up so you may not get back the money you invest. Please ensure you understand the risks.

How it works

As an investor, the process is as follows:

  • Register: Register for an account on the Landbay site
  • Chose: Chose which investment product you would like to invest in
  • Invest: Invest how much you would like, and Landbay will automatically diversify your investment across multiple loans
  • Earn: Interest repaid on the loans will be passed on to you, and you can chose to withdraw or reinvest it

For borrowers, the process for applying for a buy-to-let mortgage is:

  • Apply: Apply for a buy-to-let mortgage from Landbay
  • Filtered: Landbay’s mortgage brokers will filter applications to identify who to pass on to the underwriting team
  • Credit check: The underwriters scrutinise each claim, giving a decision in principle within 48 hours
  • Valuation An independent RICS surveyor is sent out to inspect and value the property
  • Matching: Once approved, the mortgage is matched to investor funds, and starts earning interest
  • Repayments: The borrower earns rent and makes interest repayments to Landbay, until the mortgage is settled

Benefits to investors

As an investor, you have the option to chose how much you would like to invest and in which investment product. Some of the benefits include:

  • Your investment starts earning interest within 24 hours of receipt of cleared funds
  • No investment fees
  • Investment is automatically diversified
  • Monthly repayments you can withdraw or invest
  • Sell your investment any time on the secondary market
  • Protection from default from Landbay’s Reserve Fund

What's a Reserve Fund?

A Reserve Fund is put in place to protect investors from loan defaults.

Landbay retain a proportion of their fees, and keep this pot of money separate as the Reserve Fund. If a borrower defaults on their mortgage or if they miss repayments, the fund will be used to cover the loss of income for investors.

Benefits to borrowers

As a borrower, you are using your Landbay loan to fund your buy-to-let property. Some of the benefits include:

  • Decision in principle in 48 hours
  • Tailored decision based on your circumstances
  • Simple fee structure
  • Low interest rates
  • Hassle free application process

Criteria

To apply for a mortgage from Landbay, you, your finances and the property need to meet a certain set of criteria:

You:

  • Aged 21 or older
  • Have a UK credit footprint
  • No adverse credit in the last 24 months
  • Earn a minimum income of £25,000 a year
  • Are applying for a buy-to-let mortgage

Your finances:

  • Need a buy-to-let mortgage between £50,000 and £1,000,000
  • You have a minimum deposit of 25%
  • Satisfy the income and affordability thresholds

The property:

  • Is in England or Wales
  • The property value is at least £80,000
  • The property must be suitable for letting at completion

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