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Kensington increases LTV to 85% on BTL

Kensington has launched a new range of buy-to-let deals and increased its LTV to 85% from 75%.

It has also reduced the rental cover it requires from 125% to 120%.

The range, which caters for all types of customers, from first time landlords right through to experienced investors also offers borrowers a choice of how they would like to pay the product fee – as either a flat rate or percentage.

Landlords can choose between a two-year fixed rate mortgage for 5.24% up to 75% LTV, with a 2.50% fee, or opt for the flat fee of just £1,499 and pay a rate of 5.74%.

At 85% LTV there is a two-year fixed rate mortgage at 5.99% with a 2.50% fee and at 80% LTV, customers can choose between a two-year fixed rate at 5.69% with a 2.50% fee or go for a 5.99% rate with a flat fee of £1,499.

Charles Morley, head of sales and product development at Kensington, says: “Increasing demand for private rental property is one of the few areas that commentators agree on at the moment and consensus is that there remains significant opportunity for investors in buy-to-let.

“The problem for landlords is that, up until now, there have been few products that have really played to those areas of the market where there is demand.

“But with our new buy-to-let range, Kensington have targeted those areas of demand – providing landlords with the ability to borrow at keener rates. And, because we look at each application as a customer and not just a number on a credit score, we have been able to lower our required rental cover to 120% by assessing their circumstances.

“2011 will be a big year for Kensington and these new products are the first signal of our intent to become the lender of choice in the intermediary mortgage market. We are working on more initiatives in the coming months, so I would advise all intermediaries to watch this space.”



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  • colin 11th February 2011 at 10:15 am

    you might want to recheck your above post for its BASIC MATHS.

    Anyway i wasn t questionning the maths, only the scenario, surely no investor would buy at £415k to get £1500-£1800pcm return. and on that same basis thats why the lenders required income is £2149.20. the lenders 2.5% plus stamp duty is £20k alone.

    You were putting up a representative example which bears no likelihood of reality…imho


  • Avenue & Co Private Finance 9th February 2011 at 1:49 pm

    @ colin – re check the figures, add on the arrangement fee on £350k:

    £350,000 + 2.5% = £358,750 x 5.99% = £21,489 divided by 12 = £1,791 at 120% = £1,149.20 pcm

    BASIC MATHS Colin.

  • colin 8th February 2011 at 12:13 pm

    Re Avenue & Co……a £350k mortgage would mean a £415k purchase price….for £1800pcm income!!!!!!!!

    surely no one would consider that as a viable or savvy proposition…hence why the lenders rental calculation is such.

    It will work in my area for sure….2 bed house at £150-160k will get £800pcm

  • Avenue & Co Private Finance 8th February 2011 at 10:25 am

    Welcome news indeed – but it is really tight criteria! – a £350,000 mortgage, with lenders 2.5% arrangement fee added to loan would need a rental income of £2,149 valuation – most 3 bed houses rent around £1500 – £1800 pcm!

    Max 4 Storeys and 65% LTV for new build – and a racy revert rate of LIBOR + 5%!!! OOER!


  • Doug Hall 3mc 7th February 2011 at 7:50 pm

    Great products from an intermediary ONLY lender!! a good time to support the lenders that support our industry.

  • James 7th February 2011 at 4:23 pm

    Great news if you wish to borrow in England and Wales…what about Scotland?

  • chris gardner 7th February 2011 at 4:02 pm

    Well done to Keith Street an d his team. Come on other lenders its time to pitch in!

  • peter stimson 7th February 2011 at 3:32 pm

    Mmmmm…can’t help but think this gives credance to Neitzche’s theory of eternal return – That which happens once will do so inpertuity…

    Cutting rental yields, going to 85%+ fees, working on pay rate not revert – have we been here before? Didn’t it end in tears?

  • Valjinder s vIRDEE 7th February 2011 at 2:04 pm


  • Geoff Laird 7th February 2011 at 1:27 pm

    An excellent initiative from Kensington, whilst the pricing is a tad ripe , I am sure that for some investors keen to make as much use of the high loan to value will see it as a good buy.