In May this year Landbay secured a £250 million funding line, made up 15% from a European asset manager and 85% from a major UK bank. The announcement of the agreement with Mortgages for Business today will certainly aid Landbay’s deployment of this cash. To put Landbay’s rise into context, the platform completed its first loan – of £175K – in July 2014, less than 12 months ago, that it is now able to sign multi-million pound deals is a testament both to the success of the management and the business model. The platform has also set itself a new target for origination volume: by 2018 it plans to be lending £1bn per annum. John Goodall, co-founder and CEO of Landbay, commented:
“We started lending in 2014; less than a year on and we are winning business that would normally go to a high-street-name bank with a huge headcount”.
“This agreement is a huge vindication of the rock solid foundation we have built for Landbay and signals our shift from start-up to becoming a major buy to let mortgage lender.”
“We are excited about the next few years. We have got the right building blocks in place and we are looking for other opportunities to grow our loan book”.
The deal comes after yesterday Keystone announced that its three-year funding agreement with Aldermore Bank had ended. Goodall added:
“As far as we know this deal is a first: we don’t know of any other P2P platforms that have been trusted to step into the role that a bank would normally occupy. This is not an example of an alternative financier picking up a deal that the banks don’t want; on the contrary, we are taking business that the banks would like to keep”
The new agreement is indicative of the growing ability of P2P and marketplace lenders to compete with traditional banks, particularly given that this deal comes in the hugely competitive mortgage space. David Whittaker, Managing Director of Mortgages for Business, provided some insight into Landbay’s success:
“In a short space of time, Landbay has built a very compelling underwriting capacity that offers the kind of rapid response and high quality service that are absolutely vital to Keystone’s offering. Landbay has a very strong team, with industry veterans like Tony Ward complementing a fresh approach that founder John Goodall and Gray Stern are taking.”
Landbay’s belief that their success against relative banks stems from “fast, agile service at a lower costs” and “the capacity to scale up rapidly” bodes well for other alternative financiers who are looking to secure similar deals. It will be fascinating to see how far Landbay, and the sector, can expand over the next few years.