Landbay has announced it is closing its retail investment arm and exiting the P2P lending market in favour of becoming an institutional only platform.
Since 2017, the BTL mortgage lender’s annual lending has grown by over 500% in prime BTL loans – whilst maintaining a 0% default rate – so Landbay highlighted all retail investors have consistently earned the returns that they expected.
Landbay said it is committed to supporting all existing retail investors who have had their funds returned in full to their Landbay account, including all interest accrued to date.
The lender said the decision will impact a small part of their business as institutional funding now accounts for most mortgages to have originated in the last 12 months, with the firm witnessing significant growth over the last 24 months – which has been driven by institutional funders on its platform and been further accelerated by an additional £1bn commitment mid-year.
Landbay founder and CEO, John Goodall, commented: “Landbay’s future is incredibly exciting as we see opportunities to grow with increased interest from our existing and new institutional investors.
“Today’s announcement means that as a business we can devote even more time to lending – supporting the UK’s vibrant and vital private rental sector.
“Having said that, this is not a decision we have taken lightly. The retail business has been instrumental in our journey as a company, and we are grateful to investors for putting their trust in us.”
Landbay said the move will allow its team to focus entirely on supporting the Private Rental Sector (PRS) through an innovative BTL product offering – to build on the firm’s presence in the mortgage intermediary market.
The lender announced it will continue to fund BTL mortgages – expecting to significantly grow its lending operation – and that it remains committed to the intermediary market to ensure existing mortgage customers are entirely unaffected by the announcement.
Goodall added: “This decision comes from a position of growth and success, and we will continue to invest in our people, technology, and brand to build a successful business of scale.
“Our aim remains to be the go-to funding partner in the UK BTL market, for institutional investors, intermediaries, and landlords.”
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