New £1bn agreement signed
Thoughts from our CEO, John Goodall
I am delighted to announce that last week we signed an agreement with a leading financial institution for them to fund £1bn of buy to let mortgages over the next few years.
This additional funding will allow us to continue to serve our intermediary partners and their clients with competitive products. Unfortunately, we can’t name the institution, as we would love to publicly thank them for their vote of confidence especially in a period of significant economic and political uncertainty. We view this as an important statement of intent that we are in this market for the long-term.
On July 7th 2014, we completed our first mortgage for a gentleman through his limited company. Five years ago, before the changes in tax relief or introduction of PRA guidelines, limited company borrowing with the buy to let market was pretty rare and we were one of a handful in the market to serve such customers.
This part of the market is now termed as ‘specialist’ or professional/semi-professional. People who choose to buy through limited companies, have 4 or more properties or look at properties with high multiple occupancy (HMOs). For me the best way to sum up this part of the market is landlords who view what they are doing as a business. They are providing rental accommodation which is a crucial part of the housing mix and serves a really important function both to those that don’t want to buy or can’t buy and also to the broader economy.
This professional segment is growing significantly as rules and regulations have made it less attractive for less committed landlords. This £1bn agreement, signals a new phase of scale for Landbay at a time of rapid growth driven by this professional segment, evidenced by our lending volumes rising by over 200% in the last 12 months
We only do buy to let. As such, our people are specialist in this area. This is important to understand as it means we can provide a much better service for our brokers as well as those who invest in our loans. Our team has doubled in the last year and we’ve moved into new offices to support the investment we are making into new skilled hires across all areas of our business.
As a company grows, questions are asked of its ability to do so, whilst retaining quality. Of course, we’ve had growing pains, but I’m extremely proud of our ability to scale without compromise. After five years of lending, our default rates remain at 0%, showing our commitment to lending quality during a time of scale.
Our credit performance was a significant reassurance to our new institutional investor. We went through significant due diligence and so this funding agreement is a considerable endorsement of our people and our approach.
Over the last few months we have won numerous awards and I believe part of the reason for that is because we have built a reputation with the market for first class service that has been driven by an investment in technology and people. We will continue to invest in both of these areas as I feel very strongly that it is the team that makes a great business and the opportunities to improve what we are doing with the clever use of technology, is still immense.
I would like to thank all of the team that have helped to build Landbay into what it is today and also the many brokers that have supported us and are now partnering with us.