New BTL and development lender Blue Zest issues £1.5bn of secured retail bonds

The fixed rate bonds, offered at 5.25% per annum and due to mature in 2022, will be invested in the specialist buy-to-let and development retail mortgages lent by the intermediary mortgage arm, which launched in October.

The bonds will be offered to investors through a range of brokers, including AJ Bell and Zenzic partners until 12 December at a minimum investment of £1,000, with the first coupon payable on 15 June 2018.

The specialist mortgage lender is targeting frequent issues of one, three and five-year bonds.

Chris Slater, chief executive of BlueZest said: “The BlueZest Secured Retail Bond arrives at a time when demand in the UK’s residential property market continues to outpace supply. BlueZest is determined to support professional property investors, providing a crucial alternative funding source, enabled by our retail bond.”

The proposition, which launched with claims to offer a ‘straight-through lending process of 30 minutes’ through a digital platform to its small business and landlord borrowers, which include first-time buyers.

Early distributors

Its early distributors for the buy-to-let product include All Types of Mortgages (ATOM) and TBMC and most recently packager and network Connect For Intermediaries, for both its Appointed Representative, Directly Authorised advisers and the wider market. The lender is open to discussions with more distributors.

The products are offered to individuals, trading companies and Special Purpose Vehicle (SPV) companies.

BTL rates start from 3.69% at 60% LTV rising to 5.35% on 85% LTV in London and the South East, just the second buy-to-let mortgage to go to 85% LTV in the market.

With zero valuation fees in many cases, the two, three and five-year fixes are available with no exit penalties or early repayment charges after the first year and the lender said the deals can work for the beginner landlord with a high existing disposable income.

These products are part of a broader range that allow landlords and developers to do refurbishments, conversions and new builds with funds advanced upfront, secured on non-development property that they already own.

The products are available for periods of up to 18 months with competitive rates between 8% and 12%, without the need for bridging finance.

At time of launch, Dale Jannels, MD of AToM, said: “This is one part of the market that currently lacks competition. We’ve been working with BlueZest for some months and are thrilled to be offering this fantastic product range, including the 85% LTV. They really have thought about the gaps in the market place and provided a product offering to assist both existing and potential landlords.”