Buy-to-let mortgage lender Landbay has officially closed its retail investment arm and exited the peer-to-peer lending market in favour of becoming an institutional-only platform.

Over the last two years, the firm’s annual lending has grown by over 500% in prime buy-to-let loans while maintaining a 0% default rate.

However, Landbay says it will continue to support all existing retail investors who have had their funds returned in full to their Landbay account, including all interest accrued to date. It will also continue to fund buy-to-let mortgages and expects to significantly grow its lending operation.

The decision will impact a small part of their business as institutional funding now accounts for the overwhelming majority of mortgages originated in the last 12 months.

Landbay has witnessed significant growth over the last 24 months, driven by institutional funders on its platform and further boosted by an additional £1 billion commitment mid-year.

The move will allow Landbay to focus entirely on supporting the private rented sector through a buy-to-let product offering and building on the firm’s presence in the mortgage intermediary market, which it will remain committed to.

John Goodall, founder and chief executive officer of Landbay comments: “Landbay’s future is incredibly exciting as we see opportunities to grow with increased interest from our existing and new institutional investors.”

“This announcement means that as a business we can devote even more time to lending – supporting the UK’s vibrant and vital private rental sector.”

He says despite the decision to exit retail peer-to-peer lending, the retail business has been instrumental to Landbay’s journey as a company.

“This decision comes from a position of growth and success, and we will continue to invest in our people, technology, and brand to build a successful business of scale,” he adds.

“Our aim remains to be the go-to funding partner in the UK buy-to-let market, for institutional investors, intermediaries, and landlords.”