1st Peer To Peer Buy to Let Mortgage

1st Peer To Peer Buy to Let Mortgage.

Landbay is a peer to peer lender.

Landbay has just anmounced the completion of its first peer to peer buy to let mortgage.

What is peer to peer lending?

It is where investors are looking for a higher return on their cash savings by lending to others via a "crowd funding" platform to acheive higher interest rate returns.

Landbay offers returns to investors on cash loans of between 9.3% and 4.1% depending upon the risk level of loan you are prepared to support.

In this first peer to peer buy to let mortgage, the interest rate charged to the new landlord/borrower for the property amounted to 5.12% fixed on a 74% loan to value.

What is so different about peer to peer lending?

We do not see any major difference to technically what a bank or building society does.  You deposit your savings with a bank or a building society and they add interest to you savings.  Behind the scenes, they are then using your capital to lend to others at higher interest rates meaning both they and you are making a profit as you money has been lent out.

We believe peer to peer lending will become more popular over the coming years and we believe it is excellent competition for banks.

The government and regulators clearly want more competition and diversity in the lending market to promote competition.  It has already been confirmed that peer to peer lending will be allowed inside your ISA and there are also proposals now for pension funds to be allowed to offer peer to peer lending facilities although given the restrictions on pension loans and residential property, it may have to be via a commercial peer to peer lending platform rather then direct.