The Daily Telegraph has published a correction about a misleading article it published about Lendy on October 9th 2017. In its print and online editions on November 15 2017, The Daily Telegraph published the following:
The article itself included a number of misleading and inaccurate statements. Please see our response to Telegraph articles below.
At Lendy, we have a lot of respect for the role of newspapers like The Telegraph, and recognise the important role they play. On this issue though we felt very strongly that the newspaper's headline was patently misleading and needed correcting.
- The Daily Telegraph suggested that Lendy is under scrutiny by the FCA. This is not true.
- Like many other P2P platforms, we are applying for full FCA authorisation. The FCA meets with us regularly as a routine part of this process.
- The Daily Telegraph suggested that every Lendy loan more than one day overdue for repayment is in default. This is not true.
- Lendy loans are property-backed bridging and development loans. In this market, it is common for lenders to extend the terms of a loan to give a borrower more time to deal with an unavoidable delay, such as in planning approval or the sale of a property.
Bridging loans are often repaid by the sale of a property, so a normal delay in the sale of that property means the lender needs to extend that loan. The bridging loan market could not operate if lenders did not extend loan periods.
Lendy has a 180-day tolerance period to allow borrowers to deal with these unavoidable delays and make repayments. For The Daily Telegraph to suggest that every loan delayed by a day is ‘in default’ is misleading and fundamentally misunderstands the bridging and development loan market.
- The Daily Telegraph suggested that Lendy has in some way not properly valued the properties it lends against. This is not true.
- Lendy engages independent, RICS-registered valuers to undertake valuations on the property for every loan we offer to our lenders. The full valuation reports are available to all users of our platform, allowing them to make their own decisions over whether the loan matches their risk tolerance.
Lendy allows investors to access gross returns of up to 12% on the loans they make. On average, a loan at an interest rate of 12% can be expected to involve a higher level of risk than a loan where the borrower is able to borrow at a much lower interest rate. However this level of risk, in a diversified portfolio, should be balanced out by the higher interest rates on those loans.
This is why we recommend our investors diversify as much as possible. Lendy loans should only make up part of a balanced portfolio. Within their Lendy loans, we believe that investors should also diversify across a wide range of loans, including across different types of loan, property, and risk level. That way, if a single loan in their portfolio defaults, the effect on their overall return will be very limited.
We’re particularly disappointed that The Daily Telegraph continued to ignore the facts about our actual performance in favour of these misleading stories. We have returned £100 million to investors in the last year alone, more than double the year before. We recently returned £7.9 million to investors in what is thought to be the biggest single P2P loan repayment ever in the UK. Our balance sheet is more robust than ever, and our profits have more than doubled.