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Investor demand illustrates quality of specialist lenders – Ying Tan

by: Ying Tan, founder and chief executive of Dynamo
  • 08/11/2019
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Investor demand illustrates quality of specialist lenders – Ying Tan
This month let’s begin with a hat-trick of deals which bode well for the future of specialist lending.


Together Financial Services has completed its third residential mortgage backed securitisation. The £332m Together Asset Backed Securitisation has a 95 per cent advance rate and 79 per cent of the issued notes were rated Aaa by Moody’s and AAA by DBRS. 

Kensington Mortgages announced its 17th securitisation since 2015 with a £425m deal. The lender said there was significant demand from investors, leading to the transaction being upsized from an initial size of £285m with all tranches oversubscribed even after the increase. 

In addition, Foundation Home Loans has undertaken its fourth securitisation under the Twin Bridges platform since its inception in 2017.  

According to Foundation, the trade attracted a record order book of over £850m, with all tranches of the £300m transaction at least two times over-subscribed. There were 31 orders in total with over a third of the book coming from non-UK investors.  

The strength of investor appetite and demand for a good quality mortgage book, as outlined in these deals, should provide a shot in the arm for all specialist lenders, especially when you consider the current economic and political cloud hanging over the UK. 


Product changes

Moving onto product launches and improvements, Pepper Money has introduced new residential and buy-to-let limited editions, as well as making a number of enhancements across its core product range.  

The buy-to-let (BTL) limited edition is available as a five-year fixed rate up to 75 per cent loan to value (LTV) on Pepper 48 with a rate of 3.30 per cent and flat fee of £1,995. 

The Mortgage Works (TMW) has reduced its five-year fixed rate mortgages by up to 0.35 per cent and two-year fixed rates by up to 0.25 per cent 

For those with a large portfolio, rates for the five-year fixed rate start at 3.29 per cent up to 75 per cent LTV and two-year fixed rates start at 2.59 per cent. Both products come with a £1,995 fee. 

Clydesdale Bank has reduced both the rate and the product fee on its 2.29 per cent two-year fixed mortgage. The rate has been brought down by 0.70 per cent to 1.59 per cent and now features a product fee of £999 with £499 fee for product transfers. The product is available up to 60 per cent LTV. 


LendInvest and Leeds BS

LendInvest has announced an expanded product range with lower rates now starting from 2.89 per cent.

The changes include a £750 cashback offer on legal fees available on a five-year 75 per cent LTV mortgage for standard property types and a new £1m loan maximum for large houses in multiple occupation (HMOs) with a new 70 per cent LTV option available for these loans. 

Leeds Building Society has launched a two-year fixed rate buy-to-let mortgage at 80 per cent LTV. The product, priced at 2.94 per cent, comes with a free standard valuation, fees assisted legal services for remortgages and a £2,499 product fee. 

In terms of wide-scale product changes, it’s been a relatively quiet month but – with a plethora of outstanding deals currently available – the BTL market continues to go from strength to strength and defy any lingering sceptics. 


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