Now the model is spreading again, in a rather specific vertical.
In the UK, property is no longer mere property. It has morphed into a form of money. This has seen an explosion in the ‘buy to let’ boom where property is bought and sold as an asset. The boom has largely been driven by the wealthy, and in London by the super rich. Just read this Vanity Fair article from last year.
Now a startup is aiming to bring the P2P revolution to this market, democratizing the process and making buy-to-let easier to reach for the less monied. It’s a big market. Some £21 billion went though buy-to-let mortgage lending in the UK in 2013.
Just launched in Beta, Landbay is a seed-funded startup with a platform for P2P lending for property.
It will offer lenders attractive (at least compared to banks) returns (3% to 10%, dependent on risk taken), on all secured against UK residential property to offer buy-to-let mortgages to borrowers. It claims to do this with a faster, more intelligent application process.
With a minimum investment level of £100, that means it’s pretty accessible.
Landbay is hoping to appeal to savers and investors who have struggled to secure low risk returns at rates above inflation, whether from cash accounts, savings accounts, bonds or other traditional financial products.
Competitors to Landbay’s model are Assetz and LendInvest, however, they focus mainly on lending for riskier commercial property and developer lending, not the residential buy-to-let mortgage market. It is not playing in the much riskier commercial property or bridging loan markets.
The founders are CEO John Goodall, a founder of a recruitment consultancy who sold his stake. He’s joined on the tech side by CTO Gray Stern, who is a property tech specialist and Maulik Sailor.
The UK property market is, in a word, bonkers so we’re likely to see other such sites appear soon.