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Yorkshire to lead trend with buy-to-let launch

Andy Young

Yorkshire Building Society is preparing to launch into the buy-to-let sector in the first half of 2011, Mortgage Strategy understands.

Sources say the society is seriously looking at the sector and expects to launch in the coming months.

A spokeswoman for Yorkshire says: “Following our merger with Chelsea Building Society, we have an existing buy-to-let mortgage book and we are looking into our options in this area.”

Andy Young, managing director at The Business Mortgage Company, says it is good news for the buy-to-let sector as Yorkshire has a great reputation in residential mortgages.

He says: “It is yet another example of lenders looking to buy-to-let to increase their margins without compromising on quality.

“I think more building societies will move into the sector this year and those that already sell buy-to-let will increase their presence.”

Young predicts that although the whole market will remain static in 2011 the buy-to-let sector will increase its market share.

Mark Alexander, co-founder of The Money Centre, says: “More lenders will either drive rates down or give rise to more creative and niche products. If rates are driven down and margins squeezed then we will really know that the economy is back on track.”

Last year Mortgage Strategy revealed that Abbey for Intermediaries is looking at entering the buy-to-let market in 2011 with products aimed at non-professional landlords.

And this week Kensington is set to launch a range of buy-to-let deals and increase its LTV from 75% to 85% LTV and reduce its rental cover to 120%.

Borrowers will have a choice of how to pay their fee through either a flat rate or percentage.

Last week Paragon Mortgages launched three two-year tracker products, with rates starting from 3.30%, and a three-year tracker mortgage at 3.60%.

In addition, it has introduced three two-year fixed rate mortgage products with rates starting from 4.25%.

LTVs across the new products range from 60% to 75% and all products have a 2% fee, up to a maximum of £2,000.


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