LandlordInvest will increase its minimum investment into each loan from £100 to £1,000 as of 1 July as it moves to target more high-net-worth and sophisticated investors.
This applies to both standard and Innovative Finance ISA (IFISA) accounts.
The minimum IFISA transfer-in cash balance will be £1,000 as of 1 July and as previously, no restrictions apply to IFISA transfer-outs.
The peer-to-peer property lending platform said the minimum amount that investors may sell or purchase loan parts on the secondary market will remain at £100 for now but may be increased in the future.
It said that appropriate and timely notice will be made prior to any such change and that it is making these changes to streamline the management and administration of the platform.
Filip Karadaghi (pictured), chief executive of LandlordInvest, said that raising the minimum investment to £1,000 reflects a move to target high-net worth and sophisticated investors.
He said the average investment per lender per loan is £5,000 and few lenders invest only £100.
“It’s part of a strategic move to target high-net-worth and sophisticated investors and better reflects the manual lending we offer which requires investors being involved with their due diligence, it’s not a black box,” said Karadaghi.
“You need to have a minimum understanding of both how P2P investing works and we’re trying to adapt the platform to that segment of the market.
“We haven’t had any significant reactions since telling our lenders this and our shareholders are happy with the change so let’s see how it works out.
“Out of a loan with 100 investors maybe five put in £100, so we don’t have many people investing just £100 and the average investment into a loan is £5,000 at the moment per lender. So the average investment per loan per lender is much higher than the £1,000 cap anyway.”
Karadaghi said LandlordInvest will also review whether it will block restricted investors investing in the platform’s higher risk loans, loans with ‘c’ or ‘d’ risk ratings.