FR: Why do you think the peer-to-peer industry is growing at such a rapid rate, and will it ever become mainstream?
Savers are currently suffering from poor returns and consumer trust in banks was damaged after the credit crisis. Meanwhile London is fast becoming the financial technology capital of the world and this provides an excellent opportunity for peer-to-peer.
Other factors, such as the ability to place peer-to-peer investments into IFISAs (Innovative Finance ISAs) in 2016 will continue to promote a drive-away from the high street banks.
I think that what the peer-to-peer model does is match ability with customer. The agile nature of the model enables platforms to deliver market innovation faster and more effectively which will help it to scale and to flow into the mainstream.
FR: How do you think peer-to-peer lending can transform the mortgage market?
Peer-to-peer is founded on technology and driven by quality customer service. So it has the ability to process business smartly and efficiently and therefore, to scale. We anticipate that there will be an increase in demand for business from the high quality landlords we serve at Landbay following the changes to taxation and buy-to-let announced in the budget. We are experts in the buy-to-let market for experienced landlords (including SPV companies that will now become more attractive).
FR: What steps can be taken to further inform and educate brokers about the benefits of peer-to-peer lending?
It is clear that there is a growing awareness of peer-to-peer’s role within the market. Ultimately it will all be about scale and product innovation. Peer-to-peer is able to offer some market solutions that will be embraced by brokers. However, it will take a little time.
FR: How will regulatory changes continue to influence the market?
The EU Directive or Consumer buy-to-let regulation will have a certain level of influence on the wider buy-to-let market. The changes will require brokers and lenders to be approved in order to work within these regulated areas.
However, the implications of the tax changes in the recent budget do vary depending on the type of landlord. So-called accidental landlords will now think twice before committing to buy-to-let, but the changes will have little impact on Landbay’s target borrower. We tend to lend to professional buy-to-let landlords who already hold their buy-to-let portfolios in limited companies, where there are no plans to change taxation.
On the peer-to-peerside,the introduction of the IFISA next will allow for peer-to-peer interest to be paid tax-free for Landbay investors. This would mean rates of up to 4.4% on an annualised basis.
FR: Landbay recently became the first peer-to-peer lender to join the CML as a full member – what does this mean for the business and what are your plans for the next year?
Landbay is keen to develop its place within the wider mortgage market and working with the CML will allow us to do this. The Council will provide us with an invaluable network within the sector and excellent research resources. We are committed to providing our customers with in-depth market knowledge so they can fully understand the decisions we are making in building our business, and the CML will be a great source of material for us to continue this.
Joining the CML has also been an excellent vindication of our lending processes as it is a hard application process to get through. We are delighted to be the first peer-to-peer to be offered a full membership - which is not just a great step for our business, but for the wider peer-to-peer world too.
Over the coming year(s) we will continue to scale our business in the best way possible for our investors and borrowers.
FR: If you weren’t working in financial services, what would you be doing?
I already do it (in my spare time)! I’ve been photographing developing musicians and bands for some time. Some are now becoming household names in the UK and US and selling out venues.
