Our CEO, Filip Karadaghi, was recently interviewed by Welltrado, an alternative investment marketplace.
Filip speaks about LandlordInvest's advantages for investors and borrowers, expected returns and future outlook for the P2P industry.
The interview is reproduced in full below and also available here.
How would you describe your platform?
LandlordInvest.com is a peer-to-peer lending platform which enables people and institutions to invest into loans backed by residential and commercial properties. The target audience is buy-to-let and bridging loan borrowers with a near perfect credit score, that are having difficulties with raising finance from traditional lenders, due to a one off adverse credit event in the last five years. It was the first residential property-backed Innovative Finance ISA made available to UK investors.
– What are the three main advantages for investors?
- Investors can earn between 5-12 % per annum
- Investing through LandlordInvest means that your investment is secured by property
- No auto bids, meaning that you choose which loans you wish to invest in.
– What ROI can investors expect?
Investors may earn between 5-12 % per annum.
– Is the technical platform self-developed or using white-label solution?
The lending platform is self-developed.
– How reliable is the credit rating / credit history data available?
We work with one of the three credit referencing agencies in the UK, CallCredit. We obtain credit reports on all borrowers as it is fundamental to our credit underwriting procedure which is set out here: https://landlordinvest.com/how-it-works#heading-5
– How is the company financed?
The company is financed by several high-profile business angels, including Alan Gabbay, a Director of O&H Properties, a London based private property investment company with assets of around £1 billion.
– Are you open to international investors?
Yes, provided that they pass all applicable KYC/AML checks and have a UK bank or a building society account.
– Is your platform regulated?
Yes, the platform is fully regulated by the Financial Conduct Authority. We were one of the first platforms in the UK that became fully regulated.
– Where do you see your platform in 5 years?
We want to become the leading asset-backed platform, delivering market leading risk-adjusted returns to the platform investors.
– What are your thoughts about:
- Provision funds (Mandatory or not; will it be gone in few years?)
We do not have a provision fund. There are some merits to this approach, as it potentially offers some sort of protection for lenders. However, it could be argued that such an approach is not entirely fair. All lenders have to carry the costs to support such funds, as lenders that never use the fund still have to pay into it. This opens up the potential risk of some lenders only lending to high-risk loans, knowing that they will be compensated from the provision fund when a borrower defaults. Indeed, it creates a situation where more prudent lenders have to, whether they like it or not, bail-out less prudent lenders. As such, we have chosen to only include secured loans on our lending platform.
- BuyBack guarantees (Mandatory or not; will it be gone in few years?)
We do not have buy back guarantees nor are we contemplating to have any due to various considerations, including regulatory.
– How do you see competition in markets you operate in:
- New competitors or consolidations
We are a relatively new player in the industry that have had the opportunity to develop our value proposition whilst learning from the more established platforms. We had the advantage of gaining full FCA authorisation ahead of our main competitors such as Funding Circle and Lendinvest.
New competitors will enter the market but it is becoming more difficult as the regulatory thresholds are increasing.
- Working locally or internationally
Although LandlordInvest employees an international team (our founders are Swedish, Latvian and British), we are focused on the UK given the strength of the UK‘s regulatory regime and legal infrastructure. Further, the UK has a well-developed real estate industry, attracting borrowers and investors from all around the world, and London is one of the world’s leading financial centres.
We might consider expansion to international markets in the future, provided that the market has a strong legal infrastructure and a dynamic real estate market, which is a cornerstone of our business model.
– Trends of features (e.g. secondary market, automated investment, etc.) that should be very significant
We are likely to see higher involvement of institutional investors, similar to the trend observed in the US, although the US is still years ahead of Europe in this respect.
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