Specialist peer-to-peer mortgage lender Landbay has signed an agreement with Mortgages for Business to fund its specialist lending brand Keystone Buy to Let Mortgages.
Yesterday (30 June), Keystone’s three-year funding agreement with Aldermore Bank ended, so Mortgages for Business chose Landbay to replace Aldermore.
Under the deal, Landbay, who focuses on the buy-to-let peer-to-peer market, will fund the Mortgages for Business’s core products - the new classic range.
Pricing starts at 4.75 per cent for a term tracker and 4.99 per cent for a five-year fixed rate. Key features include rates up to 80 per cent loan-to-value and products specifically for houses in multiple occupation and multi-unit properties.
The Landbay P2P lender account provides investors with two options: a fixed rate of 4.4 per cent annualised interest and a tracker rate of 3.5 per cent interest.
Procuration fees on the new range have also been increased to 0.5 per cent of the loan amount and will be paid promptly on the day of completion.
Landbay expects to fund c.£200m of loans in 2016 through Keystone and has secured a “significant” institutional funding line to finance this channel in its entirety.
The peer-to-peer lender added the deal signals a “new period of growth”. It launched with the plan of achieving a £1bn loan book by 2018, but it has now upgraded its plans to achieve £1bn in lending per annum by 2018.
John Goodall, co-founder and chief executive of Landbay, said that as far as he knows, this deal is a first, in terms of no other peer-to-peer platforms being trusted to step into the role that a bank would normally occupy.
“This is not an example of an alternative financier picking up a deal that the banks don’t want; on the contrary, we are taking business that the banks would like to keep.
“We can offer a fast, agile service at a lower cost than the banks we are competing with and our model means that we have the capacity to scale up rapidly.”
David Whittaker, managing director of Mortgages for Business, added that Landbay has built a “very compelling” underwriting capacity that offers the kind of rapid response and service that is absolutely vital to Keystone’s offering.