New peer-to-peer BTL lending scheme launches

New peer-to-peer BTL lending scheme launches

A peer-to-peer lending scheme has been launched, providing loans for overseas buyers of rental property in the UK who cannot get mortgages.

The ‘Lend to Let’ scheme has been unveiled by Assetz Capital, which says there is strong demand from high net worth investors who live abroad and want to invest in UK property, yet find themselves unable to access the regular mortgage market due to their non-domicile status.

Assetz Capital is offering borrowers 50% LTV buy-to-let mortgages at 7% for a five-year term with a 3% arrangement fee.

Assetz Capital has first charge on the property on behalf of the lenders and the rental income is also placed in a trust account which the owners can draw upon for repairs.

Assetz says this is being done to ensure that the risk to lenders is extremely low.

Stuart Law, chief executive of Assetz Capital, said: “The launch of Lend to Let represents an exciting new direction for the UK buy-to-let market, as well as the growing peer-to-peer lending sector.

“By bringing the two together we are able to plug a huge gap which has prevented good-quality, high net worth individuals from investing in the UK property market since the withdrawal of lenders from this sector.
“This mortgage will meet this demand, while at the same time offering strong returns with added security for peer-to-peer lenders. It could have a significant impact on the UK buy-to-let market, particularly in the north of England where the loan is underpinned by exceptionally strong rental yields of typically 8% gross.”

Assetz Capital aims to arrange in the region of 50 buy-to-let mortgages per month by the end of this year, rising to 100 mortgages a month in 2014.

Peer-to-peer lending is currently unregulated. Assetz Capital says it will be raising loans from its established community of over 60,000 individual investors.