1st half 2017
The results for the first half 2017, investing on the Landbay platform are as follows –
This platform does not allow you to manually invest in specific loans so there is no feedback available on defaults, rather you invest in to either a fixed rate fund (3.69% ROI) or a tracker rate (currently 3.03% ROI). The vast majority of my funds on this platform are on the fixed rate option and it’s delivered exactly as expected. This is because you can set interest to auto invest and where as with other platforms you still have to wait for a investment opportunity to become available, Landbay accrues the interest as soon as a balance is queued for investment, meaning there are no gaps in return maximisation.
Up until last month the variable rate option was 3.32% ROI, it’s now dropped 3.03% ROI. Now bare in mind current UK inflation rate is at 2.8%, so in real terms the rate is a merger 0.23% ROI which makes this option entirely an unattractive investment opportunity at this time. Considering Mark Carney of the Bank Of England has been giving strong indications in recent weeks, of a possible base rate rise from the record low of 0.25% it’s interesting Landbay have chosen to do this. One would think if a base rate rise happens in the next few weeks then the variable rate should go back up. Either way Landbay are cutting it very thinly for an investor to make any kind of return on the variable rate. It is worth mentioning though, over the last 6 months Landbay have had periods of very high demand, driven more by the lack savings options in the wider market, to the point where new investors were being queued for up to 6 weeks. So Landbay could just be attempting to control demand. For me the fixed rate combined with a slightly safer investment opportunity in Landbay is encouraging me to keep Landbay on for reasons of portfolio diversification, just. But if a spike in inflation happens in the future, wiping out my fixed rate gain, i’m going to struggle to justify keeping Landbay in my portfolio.
So to conclude, Landbay has done exactly what was promised in terms of return. The platform is generally considered a slightly safer option than other platforms, because of the buffer of auto diversification plus it operates a provision fund to protect from defaults in the short term. The platform itself in a nice looking, easy to use, straight forward interface. The only negative being, which is a significant one, the rates are very low compared to what else is currently available in the P2P market place. I shall consider Landbay very closely over the next 6 months before deciding weather it has a place in my portfolio.