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Kensington drops 85% deals as funds peter out

ANDY YOUNG - LITTLE IMPACT ON SECTOR
ANDY YOUNG – LITTLE IMPACT ON SECTOR

Kensington, the only lender to offer 85% LTV buy-to-let deals, pulled them last week.

It also withdrew its 90% LTV residential mortgages, claiming it is nearing the end of its tranches for these products after a bumper August.

A Kensington spokesman says: “We are nearing the end of current tranches on certain products and to maintain consistency of service for intermediaries, we are temporarily withdrawing these products.

“We are working on new products that we expect to launch shortly.”

The lender increased its maximum LTV for buy-to-let from 75% to 85% in February and launched the 90% LTV deals in May.

It will continue to offer buy-to-let products up to 80% LTV and residential deals up to 85% LTV.

Also last week, the Post Office pulled out of buy-to-let lending for the foreseeable future. It says it has withdrawn its range of buy-to-let mortgages which offered two, three and five-year fixed rate products up to 80% LTV so it can focus on residential borrowers.

A statement from the Post Office says: “This will enable us to focus on helping first-time buyers, movers and remortgage customers to get a competitive mortgage.” The Post Office launched into the buy-to-let market in September 2007.

But Andy Young, chief executive at TBMC, says neither move is likely to have a significant impact on the buy-to-let sector.

He says: “I understand Kensington was doing little business on its 85% LTV deals, while the Post Office only lent direct and most buy-to-let lending is arranged via brokers.

“It is not surprising that the Post Office has decided to withdraw its buy-to-let range as the products were funded by the Bank of Ireland, which has already pulled out of the broker market for buy-to-let.”

David Whittaker, managing director at Mortgages for Business, adds that the Post Office was a relatively small player in the buy-to-let market.

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