Skipton re-enters buy-to-let market
Having temporarily ceased buy-to-let lending in 2009, Skipton Building Society is returning to this market with new two and three-year fixed rate mortgages.
With its national estate agency business, Connells Group, echoing market sentiment that the landlord sector is experiencing a resurgence, the Society believes the time is ripe for doing its bit to meet the associated mortgage demand.
Sequence Lettings, which is part of the Connells Group, saw the number of people looking to rent through its 82 national branches increase by 37% in 2010 compared to the previous year. And the upward trend continues in 2011, with around 8% more tenants seeking accommodation in February compared to the same period last year.
Kris Brewster, Skipton's Head of Products, said: "Thanks to our prudent approach to lending, buy-to-let has always been a valuable and high-performing part of our mortgage portfolio. However, we decided to temporarily cease offering buy-to-let loans in 2009, as a cautious step to protect the business from the uncertainties facing the markets and economy at that time.
"However, with evidence that the housing market is beginning to stabilise, albeit with the potential for further limited house price falls later this year, we believe it's now appropriate to make a controlled, low risk return to this space. Therefore, we have decided to offer a set of straightforward and competitive products which we hope will appeal to both existing landlords and new ones hoping to make the most of the investment opportunity this sector represents."
Kris added: "This is just the latest example of how, as a mutual, we are doing our bit to provide product solutions which help fulfil people's evolving homeownership aspirations.
"We believe the buy-to-let sector is a key component of a successful housing market, with private landlords meeting a real social need and providing a vital first stepping stone towards homeownership for tomorrow's first time buyers - who are the oil which keeps the housing market machine moving."
Product Highlights
2 year fixed rate mortgage - up to 60% LTV
Interest rate: 4.49%
Fixed until: 31/05/2013
3 year fixed rate mortgage - up to 60% LTV
Interest rate: 5.49%
Fixed until: 31/05/2014
Other features applicable to all above products
Application Fee: £245, payable upon application and non-refundable
Completion Fee: £1,250 payable upon completion or can be added to the loan
Overpayments of up to 10% per annum allowed without charge
Early repayment charge: 4% of capital repaid plus interest to the end of the month during the product period
Reverts to: Bank Base Rate (BBR) plus 4.45%, currently 4.95%
Free standard valuation and legal fees for remortgages.
Launching on 29 March, the new mortgages are available via the Society's Skipton Direct telephone service centre and through selected intermediaries.
The Society is also launching an additional, exclusive 2-year fixed rate buy-to-let mortgage through Connells Group at 4.44%, which is available via its national network of almost 500 estate agency branches, to people purchasing a property through Connells. All other product features are identical to the 2-year fixed rate product quoted above.
Steve Nation, Divisional Managing Director for Sequence Lettings, said: "With the number of UK households increasing and continued uncertainty over jobs and the economy, we have seen a trend of people renting for longer.
"This unprecedented demand along with increasing yields make now a great time for investors to expand their portfolios."
This latest offering builds on the popularity of the attractive and innovative solutions the Society has provided over the past year, ranging from varied and consistently competitive fixed and tracker rates to what is one of the only 95% LTV products available. The Society's track record for mortgage and savings value was recognised with 471 independent Best Buy table endorsements in national media during 2010.