New lender enters the buy to let mortgage market

Landlord Expert
By Landlord Expert May 28, 2010 09:38

Precise Mortgages is being backed by venture capitalists in the United States, and will advance mortgages to investment landlords who have at least a 25% deposit.

The group will offer loans through a panel of intermediaries, including L&G Mortgage Club, Mortgage Intelligence and Mortgage Next, although it would not be drawn on how much money it had to lend.

Ian Lonergan, chief executive of the group, said: "Over the last two years a fundamental mortgage shortfall has developed as lenders have exited the market, rebuilt their balance sheets, restricted their lending volume and focused on very low credit risks.

"There is therefore a significant need for new lenders to bring new funding to the UK mortgage market. Precise Mortgages has access to funding and we will bring extra liquidity to the market. Others will hopefully follow our lead and over time will help fill the funding gap that is damaging the overall economy."

The group is launching with three different mortgage deals, and rates start at 5.79% for a two-year tracker loan of Libor plus 5.15%, which comes with a 2.5% arrangement fee

Monday's launch continues the improvement in the buy-to-let mortgage market seen since the beginning of the year as new players, including the Bank of China, enter the sector.

Earlier this month The Mortgage Works launched seven mortgages for landlords borrowing up to 80% of a property's value, the first time it has offered a loan-to-value ratio of this size since early 2000. The total number of buy-to-let products available has risen from 215 at the beginning of the year to 301 now.

There has also been a gradual improvement in the rates being charged on buy-to-let loans, with the average cost of a two-year fixed rate mortgage dropping to 5.65% now, from 5.96% in September last year, according to Moneyfacts.co.uk.

The buy-to-let mortgage market has been hit particularly hard by the credit crunch, with the number of different mortgages available diving from 3,662 in August 2007 to just 301 on MOnday.

 

Landlord Expert
By Landlord Expert May 28, 2010 09:38

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