Building society 're-enters' buy-to-let mortgage market

Published by Ross Macmillan for 24dash.com in Housing

The Loughborough Building Society is re-entering the buy-to-let mortgage market with more favourable product terms as official figures show an upturn in general mortgage lending.

The society says the private rental market has picked up again, as the housing market, particularly for first time buyers, remains subdued.

Its maximum percentage loan has been increased from the previous level of 70% to 75% of the property value. This deal is only available for customers in the East Midlands in the LE, NG and DE postcodes, it said.

The product interest rate is 4.24% (APR 5.1%) and the rental income each month must cover 130% of the monthly mortgage payment. Applicants are limited to four properties on this scheme.

Chief Executive Gary Brebner says it is "quite rare for a relatively small lender to offer such competitive rates".

He said: “This is a sign of the Loughborough Building Society’s strength in the local marketplace. Offering such attractive products during a difficult economic climate is a strong message and the Society may surprise a few people with its ability to provide good value products compared to some of the larger players.  

“As a smaller society, it is easier to adapt to market changes and especially to react to market pricing for the benefit of our borrowers.”

Both the Bank of England and the Council for Mortgage Lenders have reported a recent upturn in the number of mortgages being approved.