Today Britain has voted to leave the European Union. Obviously the UK and its economy are in unknown territory and will remain so for many months. Various forecasters have predicted a wide range of potential outcomes, but here at Landbay we are confident that the strength of the Private Rented Sector will continue. Britain’s housing shortage will remain an issue and demand for rental property will continue to outstrip supply, meaning that average rents will continue to increase above the rate of inflation.
At Landbay we will continue to lend prudently and to focus on borrowers with a high level of rental income relative to mortgage interest payments (Landbay’s average rental coverage is currently 172.39%). In addition, we will ensure that our borrowers have a decent amount of skin in the game and we will avoid high Loan-to-Value lending (our average is currently 66.73%).
Last year we put our entire loan book through a Stress Test which can be accessed on our site. These results reinforce the entire premise of Landbay: to create a relatively low risk form of peer-to-peer lending, allowing investors to access one of the best performing types of loans throughout the credit crisis, buy-to-let mortgages.
Landbay has now been lending for two years and we are yet to have a late payment. In addition, we maintain our Reserve Fund based on Stress Test results in order to protect investors beyond the first registered charge that we take on every property we lend against. We will monitor what other mortgage lenders do in relation to their rates and we will continue to monitor the property market as a whole. If you wish to read more on the subject, yesterday I published an article about what might happen in the event of house prices falling, which you can read here.
And as always, please do not hesitate to contact us if you have any questions.