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Post by gusgorilla on Feb 24, 2016 2:09:14 GMT
Landbay is trying to be open on its main website by providing a link in the page footer to a statistics page. This is great, although that page raises some questions I will probably ask later once I have them straight in my head. However, I am perhaps missing the obvious, but I am very concerned that the app (logged In) part of the website does not appear to show me what has happened to the money I have deposited. It seems to have been invested in loans for me but I cannot see what those loans are, where the properties are, the LVTs, what kind of properties they are (residential or commercial), how long the loans are for, what the capital and interest repayments are, whether they are being paid on time, whether the interest rate is fixed or variable, credit ratings of the borrowers etc. I seem to have been entered into open ended commitments for indefinite periods without even being able to see what it is I am committed to. Landbay, please reassure me that this is not what has happened! Where are the details of the loans you have made on my behalf? Are they all behaving?  |
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Post by Landbay on Feb 24, 2016 9:01:38 GMT
Hi gusgorilla
Firstly, please rest assured that loans on the Landbay platform are only made on income-producing residential property, so your funds are not lent out on commercial, bridging, development property or any unsecured loans. This page shows the steps all borrowers have to undergo before being considered for a Landbay mortgage inc. credit assessment etc and our basic lending criteria is here.
Secondly, we have currently had zero late payments or defaults on any loans so the loans your investment is in are all behaving well! If we do have a default, you will be notified and our Reserve Fund is there to step in and cover late payments/losses on a discretionary basis should the case arise.
Regarding LTVs, our maximum LTV is 80% although in practice it is significantly lower; our current average is 66.82%. All our loans are interest-only and the loan terms are 10 years, although some borrowers are expected to (and some already have) repay early in which case your loan parts will be reallocated to your account and you can either withdraw them or reinvest them (as with point 2 on the 'diversification question' post).
If you wish to withdraw your funds, there is a secondary market. You can request a withdrawal at any time and these are typically processed in 5 working days. Withdrawals are dependent on inflow of new investment to replace your loan parts - to date we have not yet had to refuse a withdrawal request but please note that this cannot be seen as a guarantee for the future.
As discussed on the 'diversification question' post, we initially designed our platform without the feature to be able to see the details of the loan parts you are in as we felt that the basic information we are legally allowed to show was not enough for investors to be able to evaluate the resilience of our lending (for further information on resilience please see the results of our loan book stress testing on the Reports page). However, we have since received feedback from some customers who would still like to see their loan parts and as a result we are looking at adding this feature later this year.
Please feel free to fire over any more questions - we also have an online chat feature on our site during working hours and can answer questions specific to your account via info@landbay.co.uk
Best wishes
Landbay
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Post by gusgorilla on Mar 3, 2016 1:43:14 GMT
Hi Landbay Can I suggest that you change the site to obtain consent to tie up people's money for 10 years (in the worst case) before you allow people to invest. This 10 years seems to apply to both the "3 year" and tracker products as far as I can see. I can fully understand why you might not want to do this given how the products are currently marketed, but in circumstances where you are no longer growing you might find yourselves in deep water if you do not. Not meaning to be harsh but it seems unstable to have a liquidity model that relies on the amount of lender money coming in always being more than the amount wanting out i.e. consistent net growth forever. As soon as there is a period where this is not the case and lenders realise, in my view there is likely to be a panic as everybody tries to get their money out at once and fails. I cannot see how you could ever recover from the consequent bad publicity, legal and regulatory problems. IMO you should deal with this hole in your roof while the sun is still shining. There are a lot of people with a lot of money who want to take advantage of the new pension freedoms and are desperate to put their capital somewhere low risk where it will provide a regular long term income. It seems to me your products are a natural fit for them (us - I am one of these people). Your yields are sufficient and liquidity is not so much of an issue for this demographic. At the moment you seem to be trying to force a square peg into a round hole by targeting the bank saving account market whose requirements you cannot, ultimately, satisfy. Why not try competing with annuities, income funds etcetera instead? Saga magazine has pension investment advice as do a number of other publications aimed at my age group, not to mention social media, websites and forums. A new "retirement income" product with its own marketing campaign might save the day. I hope you find this constructive. Your underlying business model looks very sound. Message me if you would like to chat at greater length. |
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Post by Landbay on Mar 3, 2016 9:47:59 GMT
Hi gusgorillaThank you for your message. To clarify, Landbay lends on terms of up to 10 years, with the majority of our longer term mortgages currently being funded by institutional investors. Given the potential liquidity issue you've mentioned we aim to match retail investor funds with shorter underlying terms, typically 5 years or less. When capital repayments and refinancings (these often occur at the end of fixed rate periods) are taken into account we expect an average weighted term on our current retail book of < 4 years. We will sit down with our marketing team this week to ensure that this is made clearer on our website. We agree that our debt profile is well suited as a long term income product aimed at retirees. This is something that we anticipate rolling out later this year (post launch of our new Property-Secured ISA). It would be great to get your thoughts on product design (we will reach out to you direct on this). Regards Landbay |
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Post by gusgorilla on Mar 3, 2016 23:28:20 GMT
We agree that our debt profile is well suited as a long term income product aimed at retirees. This is something that we anticipate rolling out later this year (post launch of our new Property-Secured ISA). It would be great to get your thoughts on product design (we will reach out to you direct on this). Yes please do. Message me and I will give you my email address.
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Post by gusgorilla on Mar 11, 2016 0:37:01 GMT
A statement in my earlier post was in error. Because repayments are both capital and interest, and also because early repayments are allowed, it it is possible for the loan book to shrink quite quickly, therefore the panic scenario, because of a flawed liquidity model relying on indefinite growth, would not occur. Thanks to Landbay's John Goodall for pointing out my error and explaining one or two other things that were puzzling me. Hopefully he found my feedback useful too. His open and non-defensive attitude to my criticisms also increased my confidence in this platform. I will be increasing my lending here in a few months. I hope this attitude will carry through to greater transparency on the website as it develops e.g. being able to see loan parts, payments, defaults, provision fund etc. This engagement increased my trust, rather than destroying as it did with the utterly dire eMoneyUnion platform. There seems to be a divide between those platforms that struggle hard to honestly address and bottom out difficult questions, using criticism to improve their offerings, and those platforms that evade, obfuscate or even refuse to come on here and answer questions at all, such as eMoneyUnion.
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SteveT
Member of DD Central
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Post by SteveT on Mar 11, 2016 7:40:13 GMT
I too have always found John Goodall's input (and general willingness to engage with lenders personally) very helpful and insightful. I remain a fan of Landbay; it may be the tortoise (in % rate terms) in a race with P2P hares, but we all remember how that panned out in the end...
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