Lande* has re-established its data pipeline and so we’ve reassessed its 4thWay PLUS Rating. Despite quite a few more loans falling late or turning bad as its history has been maturing, it has easily maintained its 3/3 “Exceptional” 4thWay PLUS Rating. Its high interest rates…
Falls in house prices in seven of the past 10 months (according to both Halifax and Nationwide) have not perceptibly impacted overall annualised lending results at P2P lending platforms. While price changes can have delayed effects, the future also looks very healthy for lenders using…
We’ve had to temporarily take Lande’s 4thWay PLUS Rating down. Unfortunately, due to illness, Lande’s not been able to provide us with the data we need to keep assessing it on anything like the regular basis that we require. I’ve been informed that Lande will…
P2P lending companies are run by people, so lenders rely on them for getting satisfactory lending results. Their character is always going to be of interest, especially in terms of personality traits that can increase or decrease the risks to you. By “good character”, I’m…
Property lending dominates the P2P lending industry and for good reason. It’s because banks have historically had less of a grip on some parts of this market, and because high-quality borrowers have often struggled to get the loans and conditions that they need, with the…
Probably the task that we spend the most time on at 4thWay is trying to identify whether what we’ve just been told by a P2P lending provider is truth or fiction. All the processes we’ve built up over the years – from the initial, weeks-long…
Housemartin* shares a name with Assetz Capital, which recently announced it’s winding down its P2P lending side to focus on lending that is funded by financial institutions. While Assetz Capital expects lenders to continue to lend profitably as the loans are repaid, it did shock…
I don’t want to stretch this out too long, but a 4thWay user did request we publish the results of our recent survey and I think four of the key findings might be interesting or maybe even educational for you. Most people are taking efforts…
A great question from a 4thWay reader gives me a chance to explain about ways P2P lending companies can hide problem debts and how we go about finding them anyway – which 4thWay has always succeeded in doing up to this point. At the end,…
I looked at the most recent data provided to us by Assetz Capital to estimate when lenders in its Quick Access Account, 30-Day Account and 90-Day Account might expect to get their money back. I also interviewed Simon Atkinson, Head of Capital Markets at Assetz…
Swedish P2P lending provider SaveLend, part of the stock-market listed SaveLend Group AB, has now received a 4thWay PLUS Rating, after an extensive assessment of its detailed loan data. Lenders have been earning 8% to 9% after bad debts and fees over the past two…
We’ve slightly upgraded our 4thWay PLUS Ratings methodology over the past five weeks and reassessed the lending accounts that provide us with the data and access to apply our calculations. This upgrade impacts property P2P lending accounts, making it a little bit tougher to get…
Assetz Capital’s 90-Day Access Account continues to earn an Exceptional 3/3 4thWay PLUS Rating. After bad debts, which are usually paid for by a reserve fund, Assetz Capital is targeting for lenders. Visit Assetz Capital or keep reading the Assetz Capital Review.
ArchOver’s Mostly Secured Business Loans are unrated, due to lack of information. We estimate these loans have been paying lenders around interest after bad debts. Visit ArchOver or keep reading the ArchOver Review.
Lenders who subscribe to 4thWay are asking about P2P borrowers’ ability to pay back their P2P loans, while their home mortgage costs are going up. Rising rates can also potentially knock house prices down, so I’m covering that too. Especially with latest headlines on falling…
Today I want to look at how to prevent permanent lending losses caused by such things as recessions. 4thWay often alerts its subscribers in its newsletter if there are signs that a P2P lending website is lowering its standards, e.g. by accepting more borrowers with worse…
Benjamin Graham was a highly intelligent investor who basically invented the most successful way to invest in shares. He didn’t go for all the complexity of many of his other colleagues in his industry. Just like all highly successful long-term investors that we know of,…
“Safe” and “20%” interest is probably not a phrase that you can legitimately hear. But “saf” and “20%” is something else. Because, of all the opportunities where you might be able to earn that return, one of them has to be the safest among them….
In autumn last year, inflation had doubled in six months to 3%, which prompted me to write The Impact Of Inflation On P2P Lending Results. Another six months or so have passed, and the inflation rate has more than doubled again, hitting 7.8%. This means…
LandlordInvest’s Bridging & Development Loans are currently unrated, as we’re missing just a small amount of monthly data required for our minimum assessment criteria. These loans have been paying lenders around interest before bad debts. Visit LandlordInvest or keep reading the LandlordInvest Review.
LandlordInvest mostly does residential bridging loans, but also some commercial-property bridging (e.g. loans against pubs and hostels), and residential buy-to-let lending. It also sometimes covers the final costs for completing residential developments. Loans are typically between £50,000 and £500,000, lasting about one year.
LandlordInvest opened in 2017 and the total lent is now £19 million.
LandlordInvest has approved bridging loans above 75% of the property valuations and occasionally 80%, which is stretching to the limit of what we’d ever like to see for bridging loans. However, lenders are rewarded with very high interest rates on those loans. LandlordInvest insists it has to be “very, very” satisfied with the borrower and collateral when lending this much to borrowers, e.g. for one of the loans the borrower had 80 properties.
Roughly half the time, lenders are first in line to get their money back in the event the borrower has other lenders (e.g. banks). The other half the time you are not first, which substantially ups the risks, but, again, interest rates are also a lot higher for these loans, at over 13% compared to around 8.5%.
It doesn’t accept first-time property buyers, but LandlordInvest is flexible with very few hard and fast rules when approving borrowers. This isn’t unusual for bridging lending, although it does require skill: property loans can be more complex the more you allow qualitative and subjective assessments.
Continuing the theme, LandlordInvest does consider expats and adverse credit, both of which can increase risks. These again aren’t unheard of, provided the right checks and controls are in place. From the evidence we have seen, it is likely that they are.
LandlordInvest lends to property developers, but only at the very end of a project to give the developer enough cash to see it to completion. At this stage in a development, the risks are lower. LandlordInvest also primarily uses the current valuation of the property to assess how much it’s willing to lend, rather than the hoped-for sale price. These loans arguably therefore have much more in common with bridging loans than with development loans, which are trickier to do.
LandlordInvest has completed few buy-to-let (BTL) loans, which are all interest-only mortgages. They are two- to three-year loans that will eventually either remortgage to a regular BTL loan through a high-street bank or the security properties will be sold. They can also be second charge. These loans are therefore not all necessarily the primest BTL loans, but they are close. They have fantastic rental coverage, whereby the landlords are collecting rent that, on average, is 2.5 times the monthly interest payments to LandlordInvest lenders.
The proportion of loans that roll into new loans or are extended is fully acceptable, indicating good quality and that problem loans aren’t being kicked down the road.
It will be a long time before we can measure statistically how accurate LandlordInvest’s loan grading system of A-D is, but its method follows common standards and the evidence we have seen shows that the grading is likely to be largely accurate.
LandlordInvest’s weak spot is its lack of the most relevant banking experience in its key operational positions. Our starting point in assessing platforms with less experience is to be cautious and cynical, and we expect them to prove themselves to us.
While there’s always some increased uncertainty while a good record is still being built up, I believe that LandlordInvest understands what it is doing despite its limited experience. In four years it has made no obvious rookie mistakes and lending performance has been excellent. Qualitatively, I don’t get the sense that its people are merely parroting phrases to us that it has read on the internet, but that it genuinely has a fair understanding of what’s important for these kinds of loans and that it behaves in a disciplined way.
LandlordInvest uses an approach akin to what engineers call a “risk register”, in which the starting point of its loan application assessment being to score various risks and multiply them together. It’s a common method for these kinds of loans. The properties are always physically inspected by an independent assessor, which is not the case at all P2P lending companies. It’s excellent to see from a risk-control perspective.
LandlordInvest demonstrated that it considers both the borrower’s intended use of the funds and the strategy that the borrower has for repaying the loan to be of huge importance; the former is very nice from a risk perspective and the latter is essential.
Loans are reasonably spread out across England and Wales.
LandlordInvest quickly responds to loans that fall late. Again, this is essential, because it increases the chances of recovering the full debt.
In 2021, LandlordInvest scraped through with just enough history for us to conduct our ratings tests. As a result of the borderline length and breadth of its history, it was heavily penalised in our background calculations. And yet, even with the penalties, it had managed to earn the top 4thWay PLUS Rating, which is a very notable achievement.
Over-and-above the calculated ratings based on strict version of the international banking “Basel” tests, the aggregated evidence, both qualitative and quantitative, indicated that LandlordInvest conducts its lending sensibly.
However, LandlordInvest has not continued to supply us with all of the detailed data we require from all P2P lending companies as a minimum for allowing a ratings assessment. Its lending accounts are therefore currently unrated.
Despite this, it still seems more likely than not that lenders today will earn a highly satisfactory return LandlordInvest, provided you spread your money across as many loans as possible.
The interest rate of 10.51% is after bad debts, which are zero at time of writing. LandlordInvest itself had forecast between 0.28% and 4.48% bad debts per year, depending on the quality of the loan and borrower, so it has so far considerably outperformed its own expectations.
The process for getting listed on 4thWay is a long and arduous journey for P2P lending platforms, as our assessment processes and checks have been continually honed since 2014. I feel like LandlordInvest had a particularly long-winded journey, which it handled calmly, with openness and patience. You’ve got to appreciate the effort that P2P lending companies put in to provide 4thWay and individual lenders with more than enough information to make an assessment.
LandlordInvest provided us with the vast majority of information and access to people that we requested and it has been very transparent with us. It had committed to providing sufficient data on a regular basis for us to monitor its performance and reassess its ratings, but this has not happened.
The information and loan documentation that LandlordInvest provides to logged-in lenders for assessing loan opportunities is sufficient. It could improve its public statistics, but they are a good starting point. It provides sufficient and honest information on its loan-approval processes and people on its website.
LandlordInvest is too small to file sufficient information at Companies House. It has told us that was profitable in the past two years.
In our security provider Sucuri’s gentle probe of LandlordInvest’s website, it performs comparatively well. It doesn’t appear to have malware and is showing as clean by Google Sage Browsing, McAfee and Yandex. The website is secure and carries a valid security certificate, helping to protect you when you supply your personal data. It automatically directs you to a secure version of its site. Its website technology is up-to-date. It has a firewall in place.
It would be good to see a little more history and I really need to see more recent, detailed data for my team. However with the vast majority of loans repaid in full, and with attractive interest rates, LandlordInvest is likely to be a good investment in a portfolio of lending accounts.
Lenders might consider putting more money into the loans where you are first in the queue and less money in other loans until LandlordInvest has built even more of a record. However, by far the most important thing is to spread your money across as many loans as possible.
The minimum you can lend in a loan is £100 and you select loans yourself. There are just one 1-2 loans available per month, so you’ll need to stagger your money in to get it spread around enough.
If you commit to lend and then the loan doesn’t go ahead, LandlordInvest will compensate you for the inconvenience.
LandlordInvest’s account is available as an IFISA.
Yes, you can sell your good loans to other lenders for a fee of 0.5%, if any lenders are willing to buy. You set the price, so you could sell your outstanding loan for more or less than you paid for it.
Thank you for reading the LandlordInvest Review! Visit LandlordInvest.
3 PLUSes is best. What does the 4thWay PLUS Rating tell you about the risks and rewards?
Here we show the P2P lending site's own estimate (or 4thWay's if theirs are not appropriate)
Lower Risk Scores are better. How is this different to the 4thWay PLUS Rating?
£19 m since 2017 in secured short-term (bridging), plus some residential and commercial BTL loans, with early exit. Available in an IFISA
Early exit is not guaranteed. Usually, other lenders need to buy your loans
Independent opinion: 4thWay will help you to identify your options and narrow down your choices. We suggest what you could do, but we won't tell you what to do or where to lend; the decision is yours. We are responsible for the accuracy and quality of the information we provide, but not for any decision you make based on it. The material is for general information and education purposes only.
We are not financial, legal or tax advisors, which means that we don't offer advice or recommendations based on your circumstances and goals.
The opinions expressed are those of the author(s) and not held by 4thWay. 4thWay is not regulated by ESMA or the FCA. All the specialists and researchers who conduct research and write articles for 4thWay are subject to 4thWay's Editorial Code of Practice. For more, please see 4thWay's terms and conditions.
The 4thWay® PLUS Ratings are calculations developed by professional risk modellers (someone who models risks for the banks), experienced investors and a debt specialist from one of the major consultancy firms. They measure the interest you earn against the risk of suffering losses from borrowers being unable to repay their loans in scenarios up to a serious recession and a major property crash. The ratings assume you spread your money across hundreds or thousands of loans, and continue lending until all your loans are repaid. They assume you lend across 6-12 rated P2P lending accounts or IFISAs, and measure your overall performance across all of them, not against individual performances.
The 4thWay PLUS Ratings are calculated using objective criteria that can be measured and improved on over time, although no rating system is perfect. Read more about the 4thWay® PLUS Ratings.
Our service is free to you. We don't receive commission or fees from the above-mentioned companies. We receive compensation from some other P2P lending companies when you click through from our website and open accounts with them, or to cover the costs of conducting our calculated stress tests and ratings assessments. This doesn't affect our editorial independence. Read How we earn money fairly with your help.
