Landbay is trialling its buy-to-let proposition which allows lenders to invest from £100 and lets them set their own interest rate and the level of risk they wish to be exposed to.
John Goodall, co-founder and chief executive of Landbay, said: “The low minimum investment per property makes it very easy for lenders to reduce their risk further by diversifying their lending across different kinds of property and regions as well as different risk and reward levels.”
Landbay uses an auction process whereby investors put forward an interest rate based on the risk but have to compete with other investors to win the deal which creates a competitive environment for borrowers.
Mortgages for Business, currently the only broker working with Landbay, decided to get involved with the platform after a survey of its landlords revealed an appetite among the experienced borrowers to use alternative lenders.
Lenders can invest from £100 and will obtain a first charge security on a range of property types.
Returns are available from 3.5% to 10% across a choice of risk levels (three different loan-to-value bands) over a three year term.
Applications are processed within 48 hours and each mortgage is underwritten on an individual basis.
Goodall said Landbay has deliberately stayed away from riskier commercial property, bridging loan and property developer markets to achieve its low risk approach which he said makes the service appropriate as a mainstream offer.
