Landbay Review (UK Lender)
(3.8 / 5)
My Actual Account Growth*++
*++Investment reduced in August by 5000 for diversification & increased returns.
See consolidated returns for all lenders here
– Review Updated October 2018
Read my 100% unbiased Landbay review here. Based on my own investing experience. Highlighting the positives and negatives of investing with one of the UK’s most popular and safest Peer to Peer lenders.
Landbay is a medium size Peer to Peer lender providing loans to experienced buy-to-let landlords with properties which have low loan to values (LTV less than 71% ). Rental incomes typically cover a minimum of 125% of the mortgage payment.
Landbay offer lower returns (3.10% – 3.49% – October 2018) compared to some other lenders. However with the safety of secured income property, and a provision fund that provides another layer or protection to lenders. Landbay is about as close to a bank as you can get. Although they are not a bank, and as with any investment, remember your capital is at risk.
Obvious Investor Easy-Info Table
|Overall Rating*:||(3.8 / 5)|
|Who can invest:|
|Estimated Return:||3.10% to 3.49% depending on account.|
|My Actual Return:||3.49%|
|Risk Rating*:||2/10 - Low|
|Early Exit:||Yes. Under normal market conditions. |
0.20% fee plus difference on fixed rate account.
No fee on tracker account.
|Min. Investment:||£100 first deposit on standard accounts. |
£5000 for ISA account.
|Deposit Funds:||By bank transfer or Visa debit card. Usually takes 24 - 48 |
hours for BACS bank transfer.
Can be same day for Faster payments.
Debit cards can take up to 3 days to clear.
|Loan Security:||Yes: on property.|
|Default Rates:||Landbay expect a 0.10% default rate. |
However there have been no defaults to date.
|Loans Amortize:||Some yes. 25 year mortgages. |
Some loans interest only.
|Time to Invest:||Medium. |
Can take a few days depending on loan availability
|Time to Mange:||None (auto-invest)|
|When are Payments Received:||Monthly.|
|Amount Lent:||£168m +|
|Number of Investors:||Not published|
|Loan/Dflt Stats:||Click Here!|
|Location:||HQ - London, UK.|
|Telephone:||(0)207 096 2700 (UK)|
|Cashback**:||Yes! £50 Cashback! Click here for further information.|
|How to Sign Up**:||Sign Up Here!|
Landbay were launched in 2014 in the UK. In the 4 or so years they have been in business, they have built a portfolio of over £168 million lent on properties with a value of over £230 million. They are proud to declare that they have had zero defaults since they have been in business which is a great track record however you look at it. Even if there were to be defaults in the future I would not personally worry about it based on the security all of their loans have, and the provision fund on top of that, it is unlikely I would lose much capital if any at all.
Personally I have some capital in Landbay but not as much as in some of the other P2P lenders as I don’t mind taking a little extra risk for the higher returns. If you are very risk averse though, Landbay could be a good option for you.
Landbay are regulated by the UK’s Financial Conduct Authority (FCA) with full permissions under FCA number 719626. They gained FCA permissions in December, 2016. It’s important to note that the FCA is not the same as the FSCS (Financial Services Compensation Scheme), so capital is not protected as it would be in a bank.
Opening an account with Landbay is fairly easy. Just the usual ID & anti money-laundering checks. If they can verify you though one of the UK’s credit agencies, you will be approved immediately. If not, you may need to send them a copy of your passport or driving license, and a utility bill or bank statement. Only residents of the UK, with a UK bank account can signup with Landbay.
Deposits & Withdrawals
Deposits and Withdrawals are made by bank transfer from a UK bank, or a UK Visa debit card (visa only). From a bank account, deposits usually show up in your account the same or next working day. Debit card deposits take a little longer to clear, 2-3 days typically. Withdrawals are only to a verified bank account and typically take 2 – 3- business days.
Time to Become Invested
It can take a few days to get funds completely invested in to Landbay loans, however it doesn’t matter as Landbay is one of the only lenders to pay interest on funds, even while they are waiting to become invested. So as soon as your money is deposited and in the queue to be invested, it is earning interest.
Who are we lending to?
Landbay is a true Peer to Peer Platform. Lenders are lending directly to borrowers who are typically experienced buy-to-let property owners. Landbay just acts as a middle man, managing loans, payments and debt collection etc.
Landbay loans are all secured with tenanted buy-to-let properties with LTV’s (Loan to Values) typically below 75%. Also it’s important to note that rental incomes on properties typically cover a minimum of 125% of the mortgage payment when they are purchased, which provides an extra layer of comfort for lenders if not actual physical security.
Landbay state that to date they have had zero defaults, and no investor has lost money. This is one of the reasons return rates are lower than other Peer to Peer Lenders, lower risk = lower returns.
Some Landbay mortgage loans amortize over a 25 year period, meaning you receive capital and interest payments every month. Some loans are interest only loans, where only interest is paid monthly and the capital is repaid at the end of the loan period. Amortization is an accounting technique used to lower the cost value of a finite life or intangible asset incrementally through scheduled charges to income. Amortization is the paying off of debt with a fixed repayment schedule in regular installments over time.
Selling Loans and Withdrawing Capital
There is a 0.2% exit fee for loans in the fixed rate portfolio (no fee in tracker account). If interest rates have risen since you made the original investment, there can also be a spread fee between the rate you received and the rate when you withdraw. You can exit for free by setting auto reinvest to off, but it could take close to 25 years to become totally uninvested.
Here you can see the screen for selling loans and withdrawing capital.
Diversifying loans is something Landbay does automatically. Because of the way their platform works, diversification is all done in the background. It is not even possible to list the loans you are invested in as it doesn’t really make any difference. Their provision fund would in theory take care of any defaults. To date there have been none though.
The Landbay provision fund is currently stated as covering between 0.5% to 0.6% of all outstanding loans. This is useful for keeping payments to lenders on time in the event of a default. Landbay mortgages are all very well covered with property assets and their lending criteria is so strict, it is a very rare occurrence that the provision fund would need to be used.
Landbay offers an Innovative Finance ISA which was launched in February 2017 for UK residents. The minimum investment for their ISA is £5000 with a return of around 3.5% (varies).
Landbay offer two classic (non ISA) investment accounts:
They have a “Fixed Rate” account currently offering returns of 3.49% on loan terms of up to 25 years. This has an early exit fee of 0.20% plus any difference in interest rates if they have increased since you bought your loans.
I like the “Tracker” account which tracks the “London Interbank Offered Rate” (LIBOR) which has a slightly lower return rate. However this has zero fees for exiting the account, so it is basically a quick access account that you can instantly pull your funds out of any time under normal market conditions.
Investing on Landbay’s website is easy. You just choose your portfolio and return:
Then add money by either bank transfer or debit card (bank transfer is actually faster with Landbay which is not the norm. I typically find debit card transfers with most lenders are instant if they accept them).
And then sit back and watch your interest roll in.
Don’t forget to set your “reinvest” switch to on if you want a completely hands off investment experience. That’s it! Very much like a regular bank savings account. Remember there is no FSCS insurance like a bank though and your capital is at risk.
Landbay is one of the safest Peer to Peer lenders in the UK. Their website is built to be easy to use so just about anyone can deposit capital and receive bank beating rates. The low risk comes with a price though, low risk = low returns. If you’re new to Peer to Peer lending and a little nervous about giving it a try. Landbay are a good option for starting out and getting your feet wet.
Thumbs Up Points for Landbay
- Safety – medium size company with good history of providing secured loans to professional property investors with good LTV’s and a history of zero defaults.
- Provision Fund – another layer of protection covers a portion of lenders investments should a default occur.
- Auto-Invest –very easy to invest, and hands off investing once set up
- Website – very easy to use and understand.
- Low minimum investment– £100 to start – if your portfolio is still small, it’s still easy to invest with Landbay with a £100 minimum investment to start in regular account (£5000 in IFISA).
- Instant, no cost exit – in “tracker” portfolio in normal market conditions.
- Financial Conduct Authority (FCA) Regulated.
- IFISA available for UK investors
Thumbs Down Points for Landbay
- Investment Time – it can take a while to put money in the market initially, even if the amounts are small. Landbay pays interest from day one though so even if it does take time, you are still earning interest on your deposit.
- Lower Returns – lower risk investments means lower returns.
- Early Exit Fees – for the fixed rate account it’s going to cost 0.2% plus any difference between your loan rate and current reates.
Risk Factor – 2/10 – Low
I consider Landbay to be at the lower end of the risk scale. Taking in to consideration that all loans are secured with a low LTV, and the Provision Fund, it’s hard not to give it a perfect number 1, but this is still an investment with no FSCS government backed insurance, and as such, capital is still at risk. Although I could not find a TrustPilot rating for Landbay, their Feefo rating is very good.
Who Can Invest with Landbay
U.K. resident investors with a U.K. bank account and a U.K. address and phone number who can pass the ID checks can invest with Landbay. Contact Landbay for further information.
Offers & Signup Links**
New Customers receive £50 cashback when they join Landbay using links here on obviousinvestor.com and lend £5000.
* My opinions on ratings and risk rating factors refer to my personal experiences with the lender. Including factual data such as interest rates, loan types, security, platform history, default numbers etc. Read my Disclaimer before making investment decisions.
**Affiliated! – I am an investor with this company! (I only review companies I invest with so I can provide an honest evaluation based on my own experience). If you click on an affiliate link, I may receive a small commission, at absolutely no cost to you. It helps me to run this website and continue to offer new reviews and updates.