Risk Statement

Landbay enables you to invest in buy‐to‐let mortgages, secured by British property. Each investment acts as an individual loan contract with the borrower, Landbay is not a party to those loans but agrees to administer them under our Terms and Conditions.

Whilst we take precautions to ensure your investment is performing well, as with any type of investment, there are risks involved. Below we outline what we believe these risks to be and our approach to mitigating them.

Market Risk

Unlike other peer‐to‐peer platforms we do not offer unsecured consumer loans, small business loans or offer higher‐risk mortgages for property development, bridging or commercial real estate purposes. It’s a conservative approach to lending.

A Landbay investment is secured by British property, more specifically buy‐to‐let property. The rental market in the UK has shown resilience and strength over time and through financial cycles, and this is a key reason why we chose rental property as the underlying asset class. Statistically it’s the lowest risk asset class available in UK peer‐to‐peer investments.

Whilst fluctuations in property prices are unlikely to impact your investment directly, we believe the biggest risk to your return is the borrower’s ability to make their loan repayments, and rental demand can have an impact upon this. Our underwriting and investment diversification processes are key in our approach to protecting your investment against market risk.

Our Underwriting

We conduct comprehensive identity, fraud and credit checks as well as performing due diligence on the underlying property, which includes an independent professional valuation. We assess the Borrower’s credit history, level of assets and liabilities. We also perform detailed analysis of the property’s rental income to assess the affordability of the loan. We only consider mortgage applications recommended to us by our network of leading FCA‐regulated accredited mortgage broker partners, they help us filter out unsuitable applications, leaving only the best applicants and the most suitable opportunities for us to consider. Our borrowers are experienced and creditworthy landlords. For more information, see our full underwriting criteria.


We automatically diversify your investment across multiple loans, this adds an extra layer of protection to your investment, as it ensures you are not solely reliant on one loan, and therefore the rental demand on one property.

Late Payments and Arrears

To date we haven’t experienced any late payments, or mortgages in arrears. But, we know the day will come when we do, and we are prepared for this scenario.

Missed payments will be pursued by us and/or our loan administration provider. In the first instance, we have the ability to become receiver of rent for the property, so we can take rental payments from tenants living in the property directly and use these to pass on the interest to the investors in that loan. If a formal default occurs Landbay’s Security Trustee will move to repossess a property on behalf of the investors, in order to expedite the return of capital. See our actual and predicted Default Rates in the table below.

The Reserve Fund

Sometimes things come out of the blue, so a percentage of our income is set aside to create our Reserve Fund.

This is a discretionary fund derived solely from our borrower platform and product fees. If a borrower defaults and there is a shortfall (after selling the property and less all related enforcement costs), a claim will be made on the Fund for any remaining principal and interest due to investors in the loan. The amount that Landbay holds and how it is applied is at Landbay’s discretion. Our level of provisioning is based upon comprehensive, independent Stress Testing of our mortgage book and predictions of what losses might look like in a severe recession.

Landbay does not guarantee that a claim will be approved, nor that there will be sufficient funds available within the Fund to cover.

To date there have been no claims on the fund. Find out more about the Reserve Fund here.

Investment Liquidity

Landbay matches your Fixed and Tracker Rate investments with buy‐to‐let mortgages with terms of up to ten years. There is a risk that we may be unable to reallocate your loan parts should you wish to access your funds prior to these mortgages being repaid or refinanced in full.

When an investor requests to withdraw their funds we use sophisticated technology to match loan parts to new investors. We do endeavour to complete all withdrawal requests within a few days, however, this is contingent on the availability of another investor, or investors replacing your investment and therefore cannot be guaranteed.

Landbay Platform Failure

Should Landbay cease to trade, all mortgages would continue to be managed through to repayment with minimal disruption by our Security Trustee and a third‐party Loan Administration provider. All loan contracts are direct between a borrower and a lender (investor) and the security is held in trust by the Security Trustee.

Landbay holds unlent funds on behalf of our investors in segregated bank accounts with Barclays PLC and RBS which are FSCS protected up to £75,000, so they do not form part of our assets and would not be available to our creditors in the event of our insolvency. The security charge over properties is also held in trust for the benefit of investors.

Stress Tests

We commit to regular and independent Street Tests of our loan book (current and forecast) to Bank of England Standard.

These tests, to the same standard that banks are subjected, measure the performance of our business model in stressed economic environments akin to the Global Financial Crisis of 2008. The results of these tests help us finesse our approach and plan for the future. They also provide the basis for how much we provision for in our Reserve Fund. Review our latest Stress Test results.

The Financial Services Compensation Scheme (FSCS)

Investors and borrowers on Landbay are not covered by the Financial Services Compensation Scheme. Landbay offers investors the opportunity to lend on a secured basis directly against property, and as such all loans should be considered as loan investments, not deposits.

Independent advice

We recommend that you seek independent financial advice if you are in any doubt as to whether lending via Landbay is suitable for you.

Our Default & Arrears Rates

Loans originated in2014

Actual Arrears (>45 days)*


Expected Defaults (2014)**


Actual Defaults***


Loans originated in2015

Actual Arrears (>45 days)*


Expected Defaults (2015)**


Actual Defaults***


Loans originated in2016

Actual Arrears (>45 days)*


Expected Defaults (2016)**


Actual Defaults***


* Actual arrears (as a % of all outstanding balances from loans made in the calendar year of the loan). ** Expected defaults (as a % of all lifetime default rates of amount lent in the calendar year of the loan). *** Actual defaults (a percentage of the total lent by the platform in the calendar year of the loan). Past performance does not guarantee future performance.