Kensington mortgages last week announced the launch of a new range of Buy to Let mortgages offering rates up to a maximum of 85% of the property value. This marks a move into new ground for the post-crunch mortgage market.
Buy to Let mortgages were hit hard by the credit crisis and a number of specialist lenders that had offered Buy to Let mortgages fell away, including the biggest Buy to Let player of them all, Bradford & Bingley.
As criteria tightened the maximum loan to value (LTV) was pulled back and most mortgage lenders will typically now offer a maximum of 75% of the property value but the best rates will be reserved for those with even larger deposits. This compares with the Buy to Let market of 2007 where 85% was commonplace and lenders were starting to offer mortgages to as much as 90% of the property value.
This launch is therefore significant and although the rate is higher than at lower LTVs it should be well received by landlords. This may not see a rush of other lenders looking to push out their maximum loan to value. The Mortgage Works has been offering 80% Buy to Let mortgages for some time but until now has remained the only lender aiming products at that sector.
However, it is a positive step in broadening the options for landlords and with other lenders, such as Yorkshire BS, rumoured to be launching a Buy to Let proposition it will hopefully not be the last.