LANDBAY has seen its lending volumes triple in recent months thanks to the fall-out from the buy-to-let (BTL) tax changes and a major hiring spree.
John Goodall (pictured), chief executive of the peer-to-peer BTL mortgage lender, said lending volumes for the third quarter are averaging around £17.5m to £18m a month, up from £6m to £7m a month in the first half of the year.
Goodall said although the BTL mortgage sector is still growing, high street banks are losing market share to specialist lenders like Landbay following the tax changes introduced in April 2017.
“The tax changes affect people who hold BTL property in their own name, so it has resulted in a shift towards borrowers who are portfolio landlords and who hold properties in limited companies,” he said. “High street banks are not typically suited to lend to that sort of borrower.”
Goodall also claimed the wider property market downturn has been limited to London’s super-prime sector, which Landbay does not get involved in.
“Although the property market is not booming, prices are still going up,” he added. “People look to BTL for income, so actually if prices are not rising as fast as rents the yields improve and the investment case is stronger because the return on capital is better.”
Within Landbay, the biggest driver of growth has been its recruitment drive. In May, the platform revealed plans to increase its headcount by 70 per cent this year.
Read more: New look for Landbay amid product expansion
“We moved offices in May and getting that bigger space has allowed us to grow our team so we can process more loans,” said Goodall. “We’re also making a far bigger investment into technology, both from an origination and processing and operational capability.”
Once it has built sufficient scale, Landbay intends to follow in the footsteps of Funding Circle by launching an initial public offering (IPO) in the medium term. Goodall said Funding Circle’s IPO is “proof that P2P lending is increasingly becoming a mainstream, formal lending channel.”
This story featured in the October issue of Peer2Peer Finance News, now available to read online.