Here's the latest thinking on Landbay from one of our experts.
4thWay's Quick Expert Landbay Review
Strict lending criteria and low-risk BTL mortgages for lenders
Landbay has completed over £330 million in residential landlord mortgages since 2014.
Internally assessed by one of 4thWay's risk modellers, Landbay has good processes and a team with all the experience we would hope to see. Landbay has clear lines in the sand: both the average (72.11%) and maximum (80%) loan size compared to the property price are satisfactory, and the average (192.29%) and minimum (>125%) rent compared to mortgage payments is very reassuring.
Borrowers are mostly successful landlords. Recently Landbay opened up to first-time landlords in theory, but it has clearly demonstrated to 4thWay that it is very strict about approving them in practice.
Landbay's reserve fund is large when you consider the low inherent risks in secured residential buy-to-let mortgages. Even in a severe recession and horrendous property crash, we believe the risk of even small losses for most Landbay lenders is low.
Landbay* is highly transparent, giving us all the detailed information we need to use our assessment techniques. We have no recent management accounts. While we can assume it is still loss-making as it spends to expand, it appears investors in Landbay recently paid over £2 million for around a 20% share of the business. Landbay has also completed over £30 million in mortgages funded by institutions (e.g. banks), and millions more since 2014 in P2P loans.
From the end of 2017, Landbay has greatly boosted the number of mortgages that lenders diversify into, with lenders recently lending in an average of 16 loans when contributing to new money to a Landbay lending account, which is good for high-quality property loans. Lending regularly or over a longer period increases your diversification further.
Landbay's lending accounts are available as IFISAs.
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Independent opinion: the opinions expressed are those of the author and not held by 4thWay. 4thWay is not regulated by the ESMA or the FCA, and does not provide personalised advice. The material is for general information and education purposes only and not intended to incite you to lend.
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