We take managing investor risk very seriously
Lendy is a responsible property lender and we take risk mitigation, due diligence and underwriting very seriously. Investments made via Lendy place capital at risk. Lendy is not covered by the Financial Services Compensation Scheme. See Lendy's Risk Statement.
The risk of property investment
Property investment—alongside cash, bonds and shares—is one of the four most common types of investments, and none is without some risk.
At Lendy, we take managing investor risk very seriously. This is why we have one of the most experienced and specialist credit assessment teams in the industry, who ensure each investment loan has met our rigorous and robust lending criteria. We only offer investors loans to invest in that have been through our rigorous and streamlined due diligence, credit and legal checking.
Our specialist team of lending professionals has over 100 years of mortgage underwriting experience between them. They are experts in the property market and understand how to assess and manage the risks involved.
What are the risks and how do we manage them?
Like all other types of investment, property prices and demand for property can go up and down. It is for this reason that we would recommend that our investors diversify their investments with us between a range of loans.
This way, if one of your loans falls in value, the borrower falls behind schedule and stops paying regular interest, or we need to take formal action to recover the security, you have spread your risk across a number of loans.
You should therefore consider if you are over-invested in property. If you are you might end up in trouble when housing markets slow. To avoid this, you could diversify your portfolio by holding different kinds of investments.
We feel it is important to make you aware that with investing your capital is at risk and interest payments are not guaranteed if a loan becomes non-performing.
Lendy's five-step due diligence process
1. Initial due diligence
2. Legal panel
After the loan has passed the first stage it is then reviewed by a member of our legal panel. The panel is made up of three Top 100 law firms; DAC Beachcroft, Shakespeares and Clarke Willmott, with all three law firms on holding a minimum of £10m professional indemnity (PI) insurance. For certain projects we also use Warner Goodman, which has £3m PI cover, and for loans secured against Scottish property Lendy uses Gillespie MacAndrew, which has £25m PI cover.
We use a number of highly rated independent firms to value security properties. Each firm will be a specialist in the region where the property is located. The firm will use a RICS registered valuer who is able to carry out a full red book valuation. They will also have significant PI cover.