UK’s easyMoney, the investment platform from Sir Stelios Haji-Ioannou’s easy family of brands claims that it has “never lost a penny on its loans.” This, after over three years since its entry into the markets.
However, easyMoney’s management states that their record of having no losses on loans “actually stretches back even further.”
Before the launch of easyMoney back in 2018, the company had reportedly acquired the “successful” property lending business of Tower Bridging, built up by experienced industry professional Jason Ferrando.
The established and combined track record of easyMoney and Tower Bridging “stretches back 15 years with never a penny of investors’ money lost,” the company claims. easyMoney’s team has extensive property market experience, according to a recent announcement from the firm.
CEO Andrew de Candole has reportedly taken two real estate firms from start-up to public flotation and possesses considerable real estate development experience.
The top tips for avoiding defaults on property-backed P2P loans, shared in a blog post by easyMoney, include:
- Property lending should be done by property professionals – “We believe there is no substitute for experience of multiple property cycles and having underwritten a large number of property-backed loans. easyMoney is run by a team with decades of experience in the UK property industry. P2P platforms lending against property development projects run by people who don’t have property development backgrounds may easily miss potential problems.”
- Never lend against illiquid properties – “That experience through multiple property cycles has taught us that lending should only be secured against saleable properties. That means no unusual properties and no unpopular locations – just good-quality affordable homes in places people want to live, preferably not far from large towns and cities. We don’t lend against high-value property in London or elsewhere.”
- Lend to experienced property professionals you know – “We only lend to experienced property professionals with established track records of successful projects and repayments. Many of our loans are recommended to us through ‘word of mouth’ or new loans to professionals who have borrowed from us previously and repaid us in full – often many times. They understand the level of detail we demand in their project plans and have a track record of delivering on time and on budget.”
- Have construction experts on hand – “easyMoney will never write a property development loan unless our construction and monitoring team, with whom we have worked with for many years, have investigated and signed off on every aspect of the build. This includes costings, plans and timetables. Analysis of ‘saleability’ of designs is important and something that many lenders don’t have the experience to do. Site monitoring visits are always made monthly and drawdowns agreed after detailed analysis of work undertaken.”
- Put strict limits on LTV – “easyMoney lends at a maximum of 75% LTV on bridging loans or 70% Loan to Gross Development Value (LGDV) on development loans. The current average LTV on our bridging loan book is under 50%, while the average LGDV of the development loan book is 56%. We lend for 12 months on bridging loans and 24 months on development loans.”
As noted by the easyMoney team, all valuations are “conservative” and have reportedly been undertaken by RICS valuers with considerable experience in the specific location. easyMoney also mentions that they get valuations “based up ‘time to sell’ of 90 days and 180 days.” They also do their own desk-top valuations as a check.
Andrew de Candole, CEO at easyMoney, noted that they’re proud of their track record. This has been achieved through bringing their extensive property experience to their underwriting rules.
Andrew acknowledged that it can be challenging for peer to peer lenders without the right property industry experience to accurately or reliably identify the potential problems in a particular project. He pointed out that once you’ve been through multiple property cycles and helped with developing several different properties yourself, then you “learn to avoid the mistakes.”
easyMoney focuses on making loans to property professionals “secured by a legal charge against UK property.” easyMoney provides a range of target annual interest rates to investors “depending on the amount invested.”
A Classic Account, at easyMoney, provides as much as 3.67% for a minimum investment of £100. A Premium Account provides as much as 5.12% for a minimum investment of £10,000. A Premium Plus Account provides as much 6.06% for a minimum investment of £20,000. A high net worth Account offers “up to 7.01% for a minimum investment of £100,000.” A Professional Investor Account “offers 8% and over for a minimum investment of £1,000,000+”
High-net-worth and professional investors “can opt in to see in-depth information on all loans and can call Jason Ferrando, director of lending to discuss individual loans and their portfolio at any time,” the company noted. It also mentioned that as investment levels increase, investors “automatically move to higher target rates.”
e-Money Capital Ltd trading as EasyMoney has been authorized and regulated by the UK’s Financial Conduct Authority (FCA).
Peer-to-peer investments in the UK are “not cash savings accounts so they are not covered by the Financial Services Compensation Scheme (FSCS).”