Landbay – 18 Month Results

18 Month Results

The results for lending through Landbay over the last 18 months are in and they are as follows –

Expected ROI (Annualised) 3.56%
Actual ROI (Annualised) 3.56%

The ‘Expected ROI’ is ratioed at just over half of the balance on an earlier 3.69% fixed rate and the later 3.49% fixed rate offering. As you can see Landbay delivers bang on expectation for the 2nd time in 3 reviews they’re nothing if not consistent. Other than that there’s not really a lot to say. Not the most exciting platform by any stretch and the rates are the rates, marginally better than a one year saver although at least you can build monthly compound with Landbay.

There’s a recalculation of LIBOR due in January (Landbay recalculate LIBOR on a 3 month average) so I would expect the tracker rate to increase slightly, it’s usually around LIBOR plus 2.50%. I can’t imagine it would go higher than the fixed rate right now though.

Company News

At the time of this review Landbay were approaching £250’000’000 in total mortgage lending since they started life in 2010. This is made up of approaching 900 mortgages, c50.00% of which are in London. Landbay has still maintained it’s nil default record to date, an accolade that is increasing rare in the wider P2P sector. There are some whispers of a further crowdfunding round in the offing although it has not yet been confirmed, if it goes ahead it will be Landbays 11th funding round.


Landbay is one of them fire and forget platforms that gets on with the job without fuss and just like a (non UK) train arrives on time every time. The price you pay for consistency and convenience is reflected in the lower end rate on offer compared to the wider P2P sector. So Landbay will remain in my portfolio as a relatively sound foundation to the riskier but higher potential reward platforms I lend through.

Referral link for Landbay

This link provides a referral bonus of £100 when a new customer signs up and invests £5000 using the link (T&C’s apply). The bonus is split £50 to the new customer and £50 to, any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated. 

Landbay – 12 Month Results

12 Month Results

The first year of investing through Landbay is up, and the results are as follows –

Expected ROI 3.68%
Actual ROI 3.28%

As you can see the the ‘expected ROI’ has dropped marginally. This is because most of the investment is in a fixed rate of 3.69% however this fund was closed a few months ago, with the the new fixed rate fund offering 3.49%, as the returns are reinvested in the new lower rate fund this is causing a downward pressure on returns.

What is less easy to explain is the increased deficit between ‘expected’ and ‘actual ROI’. It is true February is a shorter month which would have a marginal difference on the run rate of ROI at this time of year. The other factor that could be causing the gap to widen is a significant drop in demand. Now considering Landbay reserve the right to queue funds in times of exceptional demand for up to 6 weeks, something i witnessed early on in this fund (informed by a notification on the fund at the time) this is not something i have witnessed since. Along with this the time that monthly returns are queued for reinvestment seems to be increasing, sometimes as long as 2 weeks. This could be indicating a significant drop in demand for new investment.

Now the length of the queue for reinvestment should not have a negative impact on returns as Landbay is one of the few platforms that accrue returns on queued investments. Looking at the wider situation, Landbay is heavily London centric (55.01% Greater London) and average London house prices have fallen back 1.5 – 2% over the last 12 – 18 months , with predictions for 2018 seeing a further drop. This will no doubt cause some pressure on the Landbay portfolio but still does not fully explain the deficit. Fund roll up (first month not being a complete month) from my own strategy could also play a part, although this was not evident in the 6 month review. I have contacted Landbay for further clarification on the cause of the drop in return and will report back as soon as i have a response.

As mentioned previously, the latest fixed rate fund is now at a lower 3.49%, this fund is also now based on 25 year mortgages (as of January 2018) rather than previously 10 year mortgages. This is not necessarily a problem as Landbay do offer sell out early options (dependant on a buyer being available) but it does indicate Landbay seem to be seeking increased stability.

As for Landbay’s future within my portfolio, February 2018 has been the first month i have experienced an issue with the expected rate of return, of course i will look in to this further before drawing a definitive judgement. It has always been difficult to get excited by Landbay’s rate of returns (current 3% inflation) with not much more than 0.5% annual return in real terms. That said i still view Landbay as a foundation fund to a diversified portfolio, but it’s meagre returns are restricting me to keep Landbay as a  relatively minor player in the overall portfolio. One big plus for me staying with Landbay beyond the returns, is it’s substantial wealth of research on the UK property market, which has been invaluable in constructing pieces for this blog. Landbay’s place is safe in my portfolio for the time being.

Referral link for Landbay

This link provides a referral bonus of £100 when a new customer signs up and invests £5000 using the link (T&C’s apply). The bonus is split £50 to the new customer and £50 to, any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated. 

Lendy – 12 Month Results

12 month review

1 year has now elapsed since i started investing with Lendy and the results are as follows –

Expected ROI 11.83%
Actual ROI 3.77%
No. Live Loan Parts 12
No. Loan parts with repayments overdue 9 (75.0%)

To compare these 12 month results with the previous 6 month results, the ‘Expected ROI’ has been reduced as i picked up a couple of 11% loan parts rather than the usual 12% loan parts. As for the ‘Actual ROI’ i should point out firstly a change in strategy. Several months ago i decided to sell off all my healthy loan parts and withdraw 20% (the most i could sell) of my liability from Lendy. This was a result of increasing concern about the lack of action on deteriorating/overdue loans. This action has been a factor in the gap widening from ‘expected’ to ‘actual ROI’ from 61.83 % to 68.13 %, although even with this factored in the trend is still diminishing returns, as part of the return is made up from affiliate credit earned through this blog.

Loan parts were also reduced in the sell off from 16 to 12. A massive 9 (10) of 12 are over due or in difficulties. The possible 10th is one the most perplexing instances i have seen from Lendy. This was a London based property loan that went live before due diligence was complete and it was quickly discovered that the borrow did not have the facility to repay the loan. As a result secondary trading of the loan was immediately suspended and hence investors have now been left holding a loan they can not dispose of as a result of Lendy making a rookie error. I should add though at this time interest payments are being made but i believe Lendy are being very optimistic to dispose of this loan with in the agreed term, so i believe this is destined to become yet another overdue loan.

I have drastically changed my strategy over the last few months from fairly passive to aggressively selling loan parts very early. Despite this returns have continued to diminish. Some loan parts in possession are now approaching 500 days over due with little end in sight. While some loan difficulties are understandable, i.e legal process such probate where Lendy has zero control for a protracted period. There are other loan parts that have promised resolution by the end of the month, month after month with no action. I also have concerns that several huge loans (plus £10 mil) have gone live with Lendy in the last couple of months, given the recent administration of Collateral UK , with an £8.5 million loan being a possible contributing factor, this makes me a little nervous. While i’m not suggesting such a drastic outcome for Lendy given their much bigger investor base and larger cash reserves, it is still increasing risk to a larger number of investors and if the loans were to fail the shock waves could very worrying.

Lendy has also announced that it will be Cowes Week title sponsor again this year, personally i’m ambivalent about this as i didn’t really witness much of uptake of new investors after last years sponsorship, but i have a very small window in to the platform. Lendy has also introduced an improved friend referral scheme. A referral through a unique link (as i use on this blog) now results in a 5% (up from 1%) share of the new friends account interest for the first 12 months, based on £1000 minimum deposit, plus a £50 bonus for both the introducer and the new customer, based on £1000 being invested for 3 months consecutively. This potentially now makes Lendy’s referral scheme one of the most generous on the market.

As for Lendy’s future within my portfolio, i have already taken steps to reduce my liability and will continue to reduce to a predetermined level when i am able to. I would need to see some serious action and repayment of the problematic loan parts over the next 6 months to consider Lendy having a long term future with-in my portfolio.

Bricklane – An Introduction


Bricklane is an online ISA lending platform exclusively operating in the UK property market. Established in 2014 Bricklane aims to create ‘ a fairer property market’. Bricklane offers a unique product in this area as it offers a combination of 2 financial products in one. You earn a return on investment on both portfolio growth and rental income. Bricklane is partnered with Zoopla (the UK’s biggest estate agent) so is considered to be well backed and relatively safe.

There are two options on where to deposit your funds in Bricklane at this time. You can either deposit in to the ‘London Fund’ or the ‘Regional Capital’s Fund’. The minimum deposit for Bricklane is £100 but there is a 2% deposit levy, which I must say is a little on the high side. With the addition of an 0.85% annual account fee.

Payments can be made by debit card (usually instant) or bank transfer (2-3 working days. You can either make a one-off payment or set up a monthly payment. Bricklane is also an ISA account so the balance is tax-free up to £20’000 in a financial year, for UK residents.

Withdrawals can be made from the entire account balance at any time providing there is demand to buy your investments,  but it can take a couple of days to process.


The Account Page

Screen Shot 2017-12-26 at 19.02.54
The Bricklane Account Summary Page

Summary – shows details of both funds combined

London – shows details of the London fund. Scroll down the page to view specific properties in the fund

Regional Capitals – shows details of the Regional Capital fund. Scroll down the page to view specific properties in the fund

In your account – shows the total balance of your Bricklane account (notice from a £100 deposit its taken away the 2% deposit charge).

Earnings – Shows your total earnings to date across both funds.

The earnings graph – Shows your earnings in graph form for each week.

Referral Link for Bricklane

This link provides a referral bonus of £225 when a new customer signs up and invests £5000 using the link (T&C’s apply). The bonus is split £125 to the new customer and £100 to, any bonuses received by this blog go towards the cost of maintaining an advert free blog and will be warmly appreciated.

Is Brexit going to make us all homeless ?

If I could accurately predict the precise effects of the United Kingdom leaving the European Union (EU) I would not only be a very rich man but undoubtedly a man in great demand. Not even the most learned academics on the planet truly know what the UK’s Brexit negotiations will ultimately lead too, but that’s why it’s exciting, no ?

So in all seriousness the idea of this blog is bring together a collection of credible sources, information and data in an attempt to lay out some possible effects and changes Brexit may have on the UK property market. This endeavor is even more of challenge at this time as the UK prime minister Theresa May has just announced, in the last few days, a ‘snap’ general election to be held on the 8th of June. This means UK politicians are now in campaign mode, and not everything in an election campaign is necessarily rooted in the unbridled truth, but I shall try my best, nevertheless. This is also in light of several European elections including France and Germany to take place over the coming weeks and months.

One of the UK’s known strategies for the transferral of legislation from the EU to the UK is known as the ‘Great Repeal Bill’. This simply stipulates that all relevant EU legislation will be transferred at the stroke of a pen to be sifted through and reconstructed at the UK parliaments leisure. I’m not entirely convinced with the ‘simplicity’. This is an institution that the UK has been increasing intertwined with for over 40 years and even if the transferral of legislation is that easy, there are also physical disconnects and un-plugs that will need careful and considered management to avoid causing untold damage to either side of the negotiating table. Including areas that could affect the robustness of the UK property market.


Is the EU institution involved in the UK housing market ? If so how ?

The short answer to this question is no, at least not directly. However there could be an argument made that the EU do regulate, at least in part some peripheries of the UK property market. One example being, what are known as securitisations. Securitisations are banded together and repackaged mortgages which are then traded by 3rd parties as entirely new financial transactions. These securitisations can make up what is commonly referred to as a Government Bond which are then traded on the International Bond Market. This is basically one way a country raises money (in the form of debt exchange) when it needs to raise capital beyond its domestic income (taxes). Now, largely speaking the origin country is usually expected to regulated their own bond offerings to the bond market (poor regulation could lead to poor bonds and a country damaging its own credit score and ability to raise money in the future, so it’s in the countries own interest to make sure what they are offing is credible and well-regulated). The UK’s regulator is the Financial Conduct Authority (FCA). So where does the EU come into play ?

In 2010 at the Pittsburgh G20 the European Central Bank (ECB) along with its international partners agreed to accelerate the ECB’s regulatory program for international monetary markets in response to the 2008 financial crisis (ECB Source). While this program is significant with particular focus towards clamping down on fiscal misconduct and the lack of best practice policies, widely seen as a substantial contributor to the financial crisis, any EU centralised regulation or unintended negative consequences of specific regulation is, and can be, at least in the large part buffeted by the fact the UK is not part of Euro currency. For example the Bank Of England have fiscal tools at their disposal to migrate or reduce any potential damage to the UK economy. So to come back to the specifics of the UK housing market in respect to the trade of mortgage securitisations on the international market, yes EU regulation could potentially affect the UK’s effectiveness for such bond sales, which in turn could affect the wider UK housing market through the availability or cost of mortgages. However the UK’s bond market is largely the UK’s responsibility and given the interconnected nature of such international markets in 2017 it seems foolish to believe that EU would ever want pursue a punitive policy against the UK designed to cause damage to the UK economy or the property market as it would very likely damage the EU at the same time, and though contagion could well ignite another global financial crisis.

The second area that needs examination would be the specifics around property and land ownership. Having spent some time searching through the EU’s online archive of available literature I have been unable to find anything that specially relates to legislation around the ownership of property in either member states or soon to be former member states. There are plenty of 3rd party research papers and analysis for most of the countries of EU (including the UK) on this subject but they stop short of being a representative view of the EU institution, in fact most of them specifically state that they are independent and non representative. So I’m afraid on this one we are going to have to venture a little way down the long and winding road of hypotheticals. It has long been a stated ambition of the EU to desire ‘ever closer political union’. One of the most fundamental tenets of any political establishment is the ‘ownership of property/wealth’. There is a remarkable amount of research conducted on behalf of EU on this subject but yet there is no concrete legislation. One might well deduce that legislation could be in the pipeline (post Brexit), but it’s equally viable that the EU intend to keep property ownership and its accompanying legislation, devolved to its constituent states (countries). After all property ownership and rights often date back centuries and vary massively from country to country. So as it stands the EU has no legislation (as far as I can find) on this subject so I think the UK’s house’s and the rest of EU members house’s are not about to be repossessed, thank goodness.

What’s the current state of foreign investment in the UK property market ?

This is largely an unpredicted consequence of the June 23rd 2016 referendum result or at least an under reported consequence, it’s also a story of two halves. On the 18th of March this year The Telegraph published an article highlighting the recent flurry of foreign investment in to the UK. This includes a £563m purchase of an office park near Reading, a Liverpool shopping centre for £300m and a £400m redevelopment in Edinburgh. What do all these investments have in common ? They are all outside of London, in fact the investors in the Reading Office park also sold its stake in the ‘Cheese Grater’ building located in the heart of London. The lack of London-based property investments on crowdfunding platforms are also noticeable in their absence.

There are multiple factors at play currently creating this situation, the devaluation in stirling being a significant one. A foreign investor buying in either American dollars or a currency pegged to the dollar can enjoy an average of a 10% effective discount (based on pre referendum exchange rates) due to the drop in stirling, if that 10% recovers in due course an investor could make millions in profit on a large investment for nothing more than their patience, a very attractive opportunity indeed. There are also regional factors at play, such as the confirmed development of the HS2 rail line, The Midlands Engine growth fund and The Northern Powerhouse growth fund.

London’s problems have been a long time coming. Excessive, unchecked foreign investment in to the capital over 20 years has resulted in hyper-inflation of property prices, the large-scale gentrification of whole postcodes and a bubble that looks fit to burst. The smart money seems to leaving London at a pace and its difficult to see how London will get out this one without enduring significant pain. You know what they say ‘what goes up must come down’ and London has gone up very high.

Domestic consumer confidence.

When talking about economics it doesn’t take long for the term ‘consumer confidence’ to come up. Consumer confidence is more of a temperature gauge, a feeling or a prediction of the health or potential growth of an economy at large, rather than a cold hard fact or data. So it’s not an exact science but it’s still a useful indicator of what the future might hold in terms of growth and economic health. For the purposes of this blog I’m going to try to focus in on consumer confidence specifically related to the property market, but let’s start with overall picture of UK consumer confidence. The latest figures for consumer confidence (based on the Consumer Price Index (CPI)) show a figure of minus 6 points for the month of March 2017. This has been fairly stable since November 2016. The biggest movement in this measure in the last 12 months was July 2016 following the UK referendum result where it dropped to minus 12 but bounced back rapidly the following month to just minus 1. In the last 10 years only 2015 has shown positive measures with 2008 setting records for negative measures, bottoming out at huge, minus 39 points in July of 2008. So what does this figure actually mean ? In essence its rolling total for most (some minor specific transactions are excluded such as those bases around criminality) of all the transactions taking place within the UK economy. So the latest figures for March 2017 state that the sum of all the transactions taking place inside the UK were 6% lower in value based on the previous years comparable month, so show a retractation in economic activity as a whole. There needs to be caveat applied here in terms of current reduced rate of Stirling, meaning foreign investment is actually at a monetary lower value, which in turn is applying downward pressure on the overall consumer confidence figure, although even with this anomaly extrapolated economic activity is still down, slightly.

So let’s look at the picture in specific relation to the UK property market. One reputable index used by a large part of the industry is the Ipsos MORI Halifax Housing Market Confidence Tracker. This is a consumer survey given to Halifax customers when conducting property transactions. Its based on a number of questions around confidence and opinion of the consumer most of which are framed ‘in 12 month’s time’ predictions. One of questions asked in the survey is as follows –

Screen Shot 2017-04-22 at 13.47.44

As you can see the overwhelming response to question of house price levels is a moderate increase over the next 12 months. This is in line with a general consensus of marginal increases in-house prices in 2017 leading to potential stability in late 2017 early 2018, reported by The Guardian, the BBC, This Is Money, and Barton Wyatt. Figures for London are bucking the trend with a slower than UK average increase in prices with some areas actually falling as the London market continues to overheat and burnout.

Screen Shot 2017-04-22 at 14.11.54

The chart above (taken from the same Ipsos MORI survey) also shows the prediction for a moderate increase of house prices, but the blue line shows responses to future confidence in the state of the UK economy as a whole. As you can see a majority of participants are lacking confidence in the strength of the wider UK economy. Now this is interesting because logic might indicate a weakening economy would lead to a drop in house prices or demand for houses. So why does this not appear to be the case ? Well the UK housing market has always been particularly resilient even when the wider economy is cooling or retracting. Part of this discrepancy could also be down cynical media reporting, everybody is told the economy will suffer post Brexit but reality so far is not supporting that theory, although that could change once Brexit negotiations are completed. Along with this there are very limited investment and saving options for UK consumer right now with record low interest rates, making property still an attractive proposition.  So with the exception of the London area consumer confidence in the UK housing market still seems to be resistant.

The wider European landscape.

Its worth considering the wider European situation from an investors point of view as well. Europe, or more specifically Western Europe has been seen as an attractive place for Middle Eastern and Asian investors for some time. There is no denying the UK is in a state of political flux right now, but looking at the alternatives in Western Europe, both Italy and Spain have considerable unemployment problems at 11.5% and 18.6% respectively although they are slowly coming down. France currently has unemployment of 10% but that is gradually increasing. Germany has an impressive sustained unemployment rate at just 3.9% however economic growth is very sluggish at just 0.4%. That being the case for most of Central and Western Europe, Eastern Europe generally has strong growth but lacks the investment infrastructure and security seen in the West. As for the UK, it’s on course for 2% growth in GDP with an unemployment rate of just 4.7%.

The verdict ?

So to conclude my humble analysis of how safe the UK property market currently is. I would say right now it’s in pretty rude health. The UK is quite insulated from European market pressures because we have an alternative currency with full autonomy. There doesn’t appear to be any major regulatory obstacles to overcome in respect to the property market in the Brexit negotiations. Foreign investment and interest in investments across the country (excluding London) in both the public and private sector seems to be strong, with support from regional growth funds. Domestic consumer confidence has taken a hit but this is often short-term and driven by speculation not facts (people who need a house will still need to buy a house even if they put it off for 6 months). UK unemployment is at the lowest rate since 1977 and growth is moderate despite the prevailing political and economic headwinds. But of course it could all turn a 6 pence, so enjoy the ride.