Kensington chases HMO and multi-unit demand

by: Heather Greig-Smith
  • 08/11/2016
  • 0
Kensington chases HMO and multi-unit demand
Kensington has launched products for houses in multiple occupation (HMO) and multi-unit buildings, and cut the price of its existing buy-to-let range.

The lender now caters for landlords looking to invest in HMOs on properties with up to six bedrooms and freehold properties with up to four multiple leases. The products are available exclusively through its specialist distribution partners.

The products are launched as investors look to HMOs and other high-yielding options as a way of mitigating buy-to-let tax changes and proposed changes to the underwriting rules.

Rates start at 3.39% for a two-year fix and 3.69% for a three-year fixed rate, at 65% loan-to-value (LTV) with a 1.50% completion fee.

There is no minimum income requirement and the products are available to existing landlords, with no additional experience requirements. Minimum property values start at £75,000 for HMOs and £200,000 for multi-unit buildings.

Kensington has also reduced prices by an average of 50 basis points across its existing range of buy-to-let mortgages, which are available through intermediaries.

Fixed rates are available up to 80% LTV, with two-year fixes starting from 2.79% and three-year fixes from 3.09%, with a completion fee of 1.50%.

Liz Syms, managing director at Connect for Intermediaries, said the HMO product was “highly competitive”.

“Unlike other lenders they will not be charging a premium on this type of lending. This product will definitely help landlords who wish to increase their exposure in this market, as HMOs have come a long way and are offering professional tenants a quality alternative solution to meet their housing needs,” she added.

Steve Griffiths (pictured), director of sales and distribution at the Northview Group, the parent company of Kensington, said buy-to-let tax changes meant HMOs were an increasingly popular option.

“Earlier this year, Kensington carried out research amongst 200 landlords and found that 55% would give more consideration to investing in HMOs as a result of buy-to-let tax changes. We believe that demand for specialist products which require a more individual approach will grow as investors look for ways to derive greater value from their investment. Our new range is built to meet this demand.”

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