Lendy

Lendy connected retail investors to short-term, property-secured loans — mostly bridging finance for developers — through a peer-to-peer lending platform. It became one of the highest-profile P2P collapses of the sector’s boom years, and the one that most changed how the FCA regulates it.

What Happened

By January 2019, the Financial Conduct Authority had placed Lendy on a watchlist as concerns grew over its loan book. The company’s chief operating officer and co-founder left around this period to set up a separate payday lending venture, and retail lenders on the platform were increasingly vocal about slow repayments. The underlying numbers explain why: 62% of Lendy’s loan book was in arrears by more than a day, and of its 54 corporate borrowers, 35 were already in or entering administration themselves.

Following FCA-initiated action, administrators from RSM Restructuring Advisory were appointed in May 2019. At collapse, Lendy held more than £160m in outstanding loans, with £90m of that already in default, against roughly £152m invested by around 9,000 individual lenders. Because P2P investments sit outside the Financial Services Compensation Scheme, those investors had no formal protection — administrators later estimated recovery at around 58 pence in the pound, before costs.

Why It Matters

Lendy’s collapse was consequential beyond its own investors: the FCA cited it (alongside the similarly-timed collapse of London Capital & Finance) when it tightened P2P wind-down rules, on the basis that a disorderly platform failure causes real harm to retail lenders who assumed a savings-like product carried savings-like protection. For a directory built around software categories that touch financing — valuation tools, conveyancing, property management — Lendy is the clearest reminder that “property tech” and “regulated financial product” aren’t always the same thing, and the protections that apply to one don’t automatically extend to the other.