LandlordInvest investors earned 12.41pc last year

LandlordInvest investors earned an overall average of 12.41 per cent in interest last year, representing a slight year-on-year increase.

However, the property lender noted that the amount lent through the platform was “significantly lower” in 2023 compared with 2022 due to macro-economic headwinds.

Over the course of 2023, LandlordInvest decreased its loan-to-values (LTVs) by 18.01 per cent, which it attributed to taking a “prudent underwriting approach in turbulent times.”

In a blog post, LandlordInvest has predicted further volatility in the UK property lending market for the year ahead.

“So far, 2024 has held a lack of quality borrowing enquiries,” said a platform spokesperson.

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“There appears to be a lot of uncertainty amongst developers and property investors as to if and when to pull the trigger on new projects. Higher interest rates also reduced residual values, developer’s profits and general viability of many development projects.

“Borrowing enquiries have increased throughout January, however nine out of ten of all enquiries received by LandlordInvest have been rejected at the initial stage of underwriting due to poor risk adjusted returns for lenders.”

The platform warned that for the first time in its history, it is possible that P2P lenders could suffer capital losses, but it reassured its investors that it working closely with its borrowers to offset any potential default risk.

“As we progress through 2024 there are a number of risks for LandlordInvest and other lenders to navigate,” the spokesperson continued.

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“Platform viability is a risk for investors in 2024. Larger, less efficient platforms have high overheads and require regular high income to cover their costs.

“The interest on many platform loans is rolled up and only received when (or if!) the loan is repaid, this puts pressure on those platforms to write more new loans as the arrangement fee is their only short term income generator – given the current slowdown in quality enquiries, it begs the question whether underwriting standards will suffer, especially in a period where there are fewer viable projects.”

Despite this, LandlordInvest still believes in the viability of P2P lending, saying “the P2P model, when executed diligently by responsible actors, is a proven one.”

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