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Portsmouth based peer-to peer (P2P) lending platform, Lendy, which lends money to property developers has collapsed after intervention from the Financial Conduct Authority. Lendy was setup in 2013 and was one of the bigger P2P property lenders with around 22,000 investors tempted by advertised returns of up to 12% and assurances that they could hand over money with "complete peace of mind".
This is a blow for the city - we create too few new jobs as it is, especially in the high growth areas where the UK has a lead such as FinTech, AI, etc. but unfortunately, it would appear this promising star was badly managed and has paid the price.
The Lendy website states, "The Lendy platform allows our investors to pool together their funds in order to finance development projects and property purchases. We ensure this process is fast, simple and efficient, and delivers a gross annual return of up to 12%, before tax, with all proposals fully assessed by our experienced credit committee before being made available for investment.
Lending is always secured with a legal charge and our loan amounts do not exceed 70 per cent of the Open Market Value, as confirmed by an independent Chartered Surveyor. This means that in the event of a loan becoming non-performing there should be sufficient equity to allow loan funds to be recouped during a sale."
One has to wonder how they went bust with £160M of outstanding loans of which, more than £90m was in default. The group is obviously dogged by questions about the quality of its borrowers and its management - whatever the detail, we do hope none of our members were investors and remind everyone that, if it sounds too good to be true….
Written & oral information and advice from the Portsmouth & District Private Landlord's Association is given in good faith, but no responsibility whatsoever is accepted by the Association or it's officers for the accuracy of it's information & advice nor shall the Association be held responsible for the consequences of reliance upon such information.