Buy-to-let mortgage lender Landbay has closed its retail arm and pulled out of the peer-to-peer market.
In a statement this morning (December 6) the company announced it would now run an institutional only platform, with chief executive John Goodall insisting the decision came from a position of "growth and success".
Landbay said institutional funding now accounted for the "overwhelming" majority of its mortgages originated in the last 12 months and the decision to exit the peer-to-peer market would only impact a small part of their business.
According to the lender all existing retail investors have had their funds returned in full, including interest accrued to date.
Mr Goodall said: "Landbay’s future is incredibly exciting as we see opportunities to grow with increased interest from our existing and new institutional investors.
"Today’s announcement means that as a business we can devote even more time to lending – supporting the UK’s vibrant and vital private rental sector.
"Having said that, this is not a decision we have taken lightly. The retail business has been instrumental in our journey as a company, and we are grateful to investors for putting their trust in us."
Landbay got P2P authorisation from the regulator in December 2016 and in January 2017 launched its buy-to-let range.
The lender is set to continue funding buy-to-let mortgages and said in today's announcement it expects to "significantly" grow this part of its lending operation.
Existing mortgage customers are "entirely unaffected" by the move, Landbay said.
Mr Goodall added: "This decision comes from a position of growth and success, and we will continue to invest in our people, technology, and brand to build a successful business of scale.
"Our aim remains to be the go-to funding partner in the UK buy-to-let market, for institutional investors, intermediaries, and landlords."
Earlier this year Mr Goodall criticised industry commentary suggesting the buy-to-let market was on a downturn, stating claims regulatory changes were forcing landlords to sell up were "a little overdone".
The Landbay head said recent tax and regulatory changes in the sector were more likely to scare off smaller landlords with only a few properties, which would eventually lead to a more professional industry.
Landlords have been subject to a number of changes in recent years, with the introduction of an additional 3 per cent stamp duty surcharge on second homes in April 2016, which was closely followed by cuts to mortgage interest tax relief.
Buy-to-let borrowers are also now subject to more stringent affordability testing under the Prudential Regulation Authority's tightened underwriting rules.
What do you think about the issues raised by this story? Email us on firstname.lastname@example.org to let us know.