Landbay has become the first peer-to-peer (P2P) lender to join the Council of Mortgage Lenders (CML) as a full member.

The company, which launched in 2013, will now play a part in industry-wide decisions made by the CML, as well as contributing to data made available to mortgage experts by the trade body.

Paul Clampin, who recently joined Landbay as Chief Lending Officer, said: “We are looking forward to being involved in the effective work the CML conducts with the government.

“We are already doing this on the peer-to-peer side of our business via the P2PFA and we are excited to play a tangible role in the development of future changes to mortgage legislation.”

In a separate development, the company said it had recently put itself through the Bank of England’s (BOE) stress test.
Landbay, which prides itself on being a low risk lender, agreed to undergo an examination similar to the one taken by UK banks.

The stress testing was independently conducted by MIAC Acadametrics and modelled on the same rigorous criteria demanded by the BOE.

Landbay said even when the test scenario replicated the return of a deep recession the results reflected no loss to its lenders.

John Goodall, Co-Founder and CEO of Landbay, said: “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.

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

A summary of the results can be found here:

1. BOE base case scenario – assuming the economic conditions expected by the BoE
= average expected loss rate of 0.03%, before interest payments  

2. BOE stress test – assuming GDP down by 3.5%, unemployment rising to 9% and UK house prices falling by 20% = average expected loss rate of 0.48% before interest payments

NB – Landbay’s contingency fund is currently maintained at 0.60% of its loan book, and would therefore absorb all these losses.