LandlordInvest to provide senior facility for ground-up developments
LandlordInvest is going to start providing the senior facility for ground-up developments, after exiting the buy-to-let market last year.
The peer-to-peer property lending platform stopped offering buy-to-let loans a few months ago to focus on bridging and development loans, which produce better margins.
LandlordInvest typically funds the second charge for ground-up developments but co-founder Filip Karadaghi (pictured) said that the platform is currently working on its first deal funding the senior facility.
Read more: LandlordInvest mulls geographic expansion after 2021 success
“We’re doing no more buy-to-let, at this time we do not feel it’s a focus, we’re focusing on bridging and development, it’s a natural evolution of products,” he said.
“Buy-to-let is a low revenue product compared to bridging and development and you need to do it at a larger scale for it to work. We’re not prioritising going in that aspect so buy-to-let becomes a less interesting product for us, it’s less economically viable given where the company is heading.
“We’re heading more towards the specialist bespoke finance space and we’re working on our first senior ground-up development deal.
“We’re starting small on senior ground-up developments and working our way up. Landlordinvest has always been very prudent when we move into something, we want to be very comfortable with it and some platforms have rushed to big developments straight away without the experience and that didn’t work out too well. The outcome is disastrous for all stakeholders.
“We will start small and once we feel comfortable and have the skills and infrastructure to cater for bigger things we will do so. We’re careful and don’t want to rush into something until we’re fully comfortable doing it.”
Karadaghi also said that LandlordInvest is targeting more sophisticated and high-net-worth (HNW) investors and will continue co-lending on a second charge basis with other lenders.
For example, it recently partnered with fellow P2P platform Blend Network to fund a ground-up development deal in Clevedon, North Somerset.
Read more: P2P entering a “new era”, says LandlordInvest chief