Peer to peer lending platform Landbay is to share publicly a range of new data – on a loan by loan basis – including type of property being lent against, loan-to-value, rental coverage, location, the interest rate paid by the borrower and the interest rate paid to the lender.
The platform, which offers secured peer to peer lending backed by tenanted British homes, believes the move will set new standards of openness in the peer-to-peer sector, making it easier than ever for anyone to assess risk, diversification and margin taken by the platform.
“Every lender on every P2P platform is taking some risk – that is why they are getting better returns than ‘risk-free’ cash savings,” said John Goodall, cofounder and CEO of Landbay.
“We believe that every lender should be compensated for the risk that they are taking. We will therefore publish the borrower and lender rates for every loan so that lenders can see that they are being properly rewarded for the risk they are taking.
“Ideally, all peer-to-peer lenders will adopt this new standard of openness as a great way to show everyone that this exciting new sector has nothing to hide and is very different from the financial old guard with its smoke, mirrors and nasty hidden surprises.”
Landbay argues the borrower rate is the best indicator of risk for a particular loan and so it will publish this for every loan that it makes.
In addition, Landbay will publish the loan-to-value and levels of rent for every property lent against, along with details of the type of property and its location. This will provide detailed evidence of diversification and the safety margins involved.