The 3 Top Property P2P Lending Sites To Lend In Now

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By on 28 February, 2017 | Read more by this author

Here is my personal list of the absolute three top property P2P lending sites from among the many excellent property lending opportunities.

1. The top property P2P lending site

I’m very sorry to be boring, but this is not surprising to any of you already familiar with P2P lending: Landbay currently has the edge over my number two, based on its low risks and its historical record.

3 Top Property P2P Lending Sites? Read the IFISA GuideI understand that this was also 4thWay CEO Neil Faulkner’s top choice of IFISA available now, so you can read what he thinks there.

Since he’s also covered Landbay, I’ll be as brief as possible about what I think are the biggest plus and minus points:

  • Landbay* has done over £10 million in P2P loans (much more if you add on loans that have been lent by hedge funds or other institutions).
  • There have been no late payments or bad debts.
  • The interest rates are around 3.75%. This is tax free to all if you lend through Landbay’s IFISA, although if you invest fairly modest amounts you pay no tax anyway.
  • Landbay automatically spreads your money across loans; we lenders don’t have to choose them ourselves.
  • It focuses exclusively on low-risk residential buy-to-let mortgages.
  • If the landlord can’t pay the mortgage then Landbay repossesses the property and repays us our money and interest.
  • On average, loans are for less than 70% of the property valuation. This means that if the property is worth £100,000 then the loans are for under £70,000.
  • On average, the landlords are earning well over 1.5 times more in rent than they pay out in monthly Landbay mortgage payments.
  • There’s a reserve fund that is 0.6% of all outstanding loans in case repossessing and selling properties doesn’t recover all the money we’re owed by the borrowers. It sounds small, but it’s a substantial extra benefit.
  • You can open an account for as little as £100.
  • One more point on lending to landlords: this is even better than lending to homeowners in that a judge might refuse to kick out a homeowning family that can’t pay its bills. Judges have no such qualms forcing landlords to sell though.

Visit Landbay*.

2. Proplend has great security and high rates

I feel a bit mean giving Proplend* in just second place in my list of top property P2P sites, and soon you’ll see why.

I like Proplend for its simple service, extraordinarily low-risk property loans and very attractive interest rates.

Here are my key points on Proplend:

  • Similar to Landbay, it sticks to lending against rented properties, which is the safest kind of lending.
  • These properties might be residential buy-to-let or they could be office blocks or other commercial premises.
    You can easily identify loans that are for just 50% or less of the property valuation, e.g. if a borrower has a property worth £1 million, the maximum borrowed in this loan is £500,000. To identify these loans, just look for Proplend’s “tranche A” loans.
  • Lending interest rates even in the lowest-risk “tranche A” range from 5.5% to 7%, which I think is very attractive for the risks involved. If you take a bit more risk with tranches B and C then you can earn more.
  • Over £10 million has been lent through Proplend although the loans are larger than with Landbay, so fewer loans have been completed. This less full history is the sole reason Proplend is only second on my list. Recently there have been more new loans on offer at Proplend than at Landbay though.
  • All borrowers are receiving monthly rent that is considerably more than the monthly payments.
  • Proplend takes six months’ interest payments in advance for extra protection.
  • As with Landbay, it’s not hard to repossess and sell property if a borrower can’t pay.
  • The downside to me is that we need to lend at least £1,000 per loan…I think 4thWay needs to pay me more. (Hint hint!)

Visit Proplend*.

(Note that you can open Landbay and Proplend accounts simultaneously using our free account opener, saving you time, and you get free guides into both platforms too!)

3. Last, but definitely not least, FundingSecure

This last one is a tough call since there are several sites that are kind of similar offering many exciting individual property loan opportunities, including Assetz Capital*, Funding Circle, HNW Lending*, MoneyThing and Saving Stream.

But FundingSecure is my final pick of the top P2P lending sites. Here are the pros and cons:

  • 3 Top Property P2P Lending Sites: what are bridging loansFundingSecure is the most substantial of my three top property sites, having done around £100 million in P2P lending, over half of which are property loans.**
  • FundingSecure offers bridging and property development loans, which are usually higher risk.
  • This is mostly because, overall, the borrowers can more easily overextend themselves, there is no rent to cover the loan payments and the risk that the debt can’t be repaid in full at the end is higher.
  • It takes a bit of work sifting through loans to choose the ones you want, but you can find even more opportunities than at Proplend for 50% or less of the property valuation.
  • FundingSecure always uses the current valuation, even on development loans, which is a good thing. (Most P2P lending sites instead use the hoped-for future valuation after the property development is hopefully completed.)
  • The interest rate lenders earn is 12% on all these loans. I believe that’s fair for bridging and developments in general, but for loans that are 50% or less of property value, that’s really good.
  • Unlike Proplend, the minimum you can lend on each loan is a highly affordable £25.
  • Unlike Proplend, it takes some work to assess the loans. In particular:
  • You have to make sure that there is a “first charge”, meaning that you are first in the queue to get your money back if there are other banks or businesses that have lent to the borrower and the property has to be repossessed, and
  • You also need to consider whether FundingSecure has agreed to lend more money to the same borrower on equal terms. Read the details to see if FundingSecure has approved other “tranches” that will increase the total debt and the risks.

Visit Landbay*, Proplend* or FundingSecure. Or, if you need even more information first, read all their Quick Expert Reviews in our comparison tables.

*The opinions expressed are those of the author and not held by 4thWay unless specifically stated. 4thWay is not regulated by the FSMA and does not provide personalised advice. The material is for general information and education purposes only and not intended to incite you to lend.

Journalists writing for 4thWay are subject to 4thWay's Editorial Code of Practice. For more, please see 4thWay's terms and conditions.

*Commission and impartial research: our service is free to you. We already show dozens of P2P lending companies in our accurate comparison tables and we keep adding more as soon as they provide us with enough details. We receive compensation from Assetz Capital, HNW Lending, Landbay and Proplend, and other P2P lending companies not mentioned above when you click through from our website and open accounts with them. We vigorously ensure that this doesn't affect our editorial independence. Read How we earn money fairly with your help.

**Note that due to how FundingSecure works by deliberately rolling over short loans, the actual total lending figure is probably a fair bit lower.

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Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers “bonds”. Unlike its P2P lending service, its bonds don’t allow you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

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Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers two “bonds”, one of which is available as an ISA.

Unlike its P2P lending service, neither of these bonds allows you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

×

Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers two “bonds”, one of which is available as an ISA.

Unlike its P2P lending service, neither of these bonds allows you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

×

Why are Orchard’s interest rates different?

Orchard’s lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Orchard’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Got it

×

Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers “bonds”. Unlike its P2P lending service, its bonds don’t allow you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

×
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