Peer-to-peer lending is increasing in popularity but many people remain unconvinced of its benefits.
This kind of lending allows many, unrelated investors to fund a loan without the use of a bank or other financial intermediary.

To address consumer fears Landbay conducted a stress test using Bank of England criteria to see how loans would perform in an uncertain financial environment.

Independently run MIAC Acadametrics found that Landbay’s loan book would be able to withstand all economic shocks that the central bank considers possible.

This includes UK house prices falling by 20% and unemployment levels of around 9%.

John Goodall, cofounder and CEO of Landbay said these results would help reassure investors that peer-to-peer lending was safe.

“These impressive results provide a firm vindication of our work to make lending at Landbay a low risk proposition –arguably the lowest risk of any P2P lending in the UK,” he claimed.

“For investors seeking better returns than those from bank savings accounts (3.5% and 4.4% currently) but without the radically higher risk of say funds investing in stock markets, Landbay is an ideal solution worthy of serious consideration.”

He added: “The great strength of BTL lending is that your return is secured primarily by the rent received by BTL landlords, rather than the underlying property value. So you are really investing in the health of the private rental market rather than the UK property market.”