LandlordInvest eyes profit in 2020 despite Covid-19 challenges

LandlordInvest expects to break even or make a small profit in 2020, despite a challenging first half of the year due to Covid-19.

Filip Karadaghi (pictured), chief executive of the peer-to-peer property lender, told Peer2Peer Finance News that the pandemic played a part in the platform experiencing an annual reduction in revenues and loan originations in the first six months of the year. He said that revenues halved from the second quarter of 2019 to the second quarter of 2020.

However, LandlordInvest was able to cut its costs by a huge amount, meaning the impact on its net cash position was not as significant as expected, Karadaghi added.

He said that cashflow has been sufficient for a small loss in the second quarter.

Then since lockdown restrictions were eased, he said that LandlordInvest had seen a surge in enquiries.

Therefore, Karadaghi said revenues in the third quarter will compensate for the poorer performance in the first half and the platform will likely make a small profit in 2020.

Read more: P2P property lenders boosted by pick-up in landlord demand since stamp duty cut

“We expect to break even or show a small profit this year,” he said.

“We’re happy to say this. In terms of loan performance and the financial position of the company it’s good news during this time.

“We’re optimistic for the future. Many of our competitors are still not lending and we’re still operating as business as usual and expect more loans in the next few months, which has increased substantially compared to the previous quarter.”

Karadaghi said that LandlordInvest has not received any forbearance requests and that the platform’s borrowers are repaying as expected. However, he predicted that some may take longer than usual to repay in the short-term as it will take longer for borrowers to refinance.

The firm added a discount facility to its secondary market in June, allowing investors to sell loan parts at up to 20 per cent below par.

However, despite this being in place, most lenders are not listing loans with the discount and the largest so far has been a discount of three per cent.

“It appears people are not that eager to get out quickly,” Karadaghi said.