A new peer-to-peer marketplace for buy-to-let mortgages is nearing lift off.
Self-styled as a direct competitor to LendInvest, LandlordInvest will facilitate residential buy-to-let and bridging loans ranging from £30k to £300k in size. The newly launched platform is advertising a return of between 5% and 10% per annum and a “personalised service”. The minimum investment amount is £100. The platform's bridging loans carry a maximum term of 18 months.
The company website advertises four foundational advantages: security in the form of British property, a fast and simple application process, flexibility and transparency. On the transparency front, LandlordInvest will offer lenders access to borrower credit scores, descriptions of the underlying property and detailed financial projections. In terms of flexibility, the platform is stressing the importance of rental income over personal income – stating that there will be no minimum income requirement for borrowers.
Flexibility in fact appears to stand out as the company’s central USP. The platform’s stated mission is to offer the best risk adjusted returns in the P2P sector, by tapping into various types of unjustly underserved borrowers. Landlords with strong rental income but less impressive personal income are one such example. High flying expats living in the UK are another. Near prime borrowers with a single, often-unavoidable blemish on their credit histories are also being targeted.
Filip Karadaghi, Co-Founder and CEO of the new platform, explained:
“We will be the first P2P lender that is looking to bridge the gap between near prime property borrowers and a lending market which last year stood at around £30 billion. We do not believe that it is fair or rational that borrowers, with nearly perfect finances, are unable to borrow because of missing a single payment years ago, caused by an unexpected life event such as a divorce or illness. Our retail and institutional lenders will be able to obtain higher returns than offered through other P2P lending platforms, as they will be providing financing to an unserved borrower market”.
LandlordInvest’s plans are certainly attention-grabbing, but only time will tell whether the verticals identified by the platform will prove as lucrative as hoped. LandlordInvest reportedly expects to receive authorisation from the FCA later this month, and will then begin trading within a few weeks.
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.