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New peer to peer mortgage launches for buy to let investors

8th May 2013 Print

Peer-to-peer lender Assetz Capital has launched 'Lend to Let', the first P2P buy-to-let mortgage, providing loans for overseas buy to let investors struggling to secure mortgages on UK property.

There is strong demand from high net worth investors who live abroad and want to invest in UK property, yet find themselves unable to access the regular mortgage market due to their non-domicile status. Assetz Capital is offering borrowers 50% LTV buy-to-let mortgages at 7% for a five year term, with a 3% arrangement fee.

This presents peer-to-peer lenders with a particularly low-risk, high return opportunity, benefitting from an income of 6.5% per annum for five years, with 0.5% cash back in the first year. Assetz Capital has first charge on the property on behalf of the lenders and the rental income is also placed into a trust account which the owners can draw upon for repairs, ensuring the risk to lenders is extremely low.

Stuart Law, Chief Executive of Assetz Capital commented:  "The launch of Lend to Let represents an exciting new direction for the UK buy to let market, as well as the growing peer-to-peer lending sector. By bringing the two together we are able to plug a huge gap which has prevented good quality, high net worth individuals from investing in the UK property market since the withdrawal of lenders from this sector.

"This mortgage will meet this demand, while at the same time offering strong returns with added security for peer-to-peer lenders. It could have a significant impact on the UK buy to let market, particularly in the North of England where the loan is underpinned by exceptionally strong rental yields of typically 8% gross."

Assetz Capital aims to arrange in the region of 50 buy to let mortgages per month by the end of this year, rising to 100 mortgages a month in 2014.

Assetz Capital raises loans from an established community of over 60,000 individual high net worth investors, linking investors directly with credit worthy borrowers. Assetz Capital has a ready-made supply of buy to let investors wishing to take advantage of the peer-to-peer funded loan from the Assetz for Investors affiliated business, which sources buy to let investment opportunities. Loans will initially only be available on Assetz for Investors sourced properties that have been through detailed due diligence and have substantial rental cover for the interest payments.

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