A limited panel of 2000 brokers will be able to access the products through L&G Mortgage Club, Mortgage Intelligence and Mortgage Next. Precise is funded by a set of long-term US private equity and debt investors, and has stated that it is always looking for more investors.
The lender insisted that its intermediary-only status meant there would be “no dual pricing or split loyalties at Precise Mortgages”.
Ian Lonergan, chief executive said: “Precise Mortgages has access to funding and we will bring extra liquidity to the market. Others will hopefully follow our lead and will help to fill the funding gap that is damaging the overall economy.”
Managing director Alan Cleary said the buy-to-let market offers good margins, adding: “Although the performance of buy to let really stood up against the mainstream market, everyone has backed away, leaving it drastically undersupplied.”
The lender has also restricted its lending panel as a defence against property fraud and will only work with Shoosmiths and Goldsmiths Williams.
“We decided to limit the number to mitigate fraud after the serious problems seen in the industry. One of the problems you have as a lender is that you have to pass the mortgage sum to the solicitor, which can be an enormous leap of faith,” said Cleary.
The lender’s biggest task, he said, is to keep talking to potential investors, adding that the conversation will get easier after the launch. Precise has launched three two-year buy-to-let trackers ranging from 5.89 to 5.99% with a maximum loan value of £300,000. Borrowers must be over 30 and the primary applicant must earn £50,000 or more. Precise pays procuration fees of 50 basis points, which Cleary said “puts it among the pack”.
Aldermore and Kensington have also launched into buy to let recently. Ray Boulger, senior technical manager at John Charcol, said: “Seeing new lenders is clearly encouraging. I don’t expect any to lend huge amounts, but the CML forecasts £150bn of lending in the UK this year. If the new lenders only do £1bn of business between them, they become extremely material to the market.”
