Shawbrook Bank Launches in to the Mainstream Buy to Let Market.

by Mark Johnston

Shawbrook Bank Launches in to the Mainstream Buy to Let Market.

Shawbrook is a new savings and lending bank who offer their customers a straightforward, no nonsense alternative to the high street.

They appear to combine traditional banking values with a modern approach.

buy to letThe bank became a licensed bank back in 1971, but in January 2011 the Royal bank of Scotland (RBS) equity finance bought the bank and therefore provided substantial capital to help the business grow.

Shawbrook now has over 22,000 personal and small business accounts with an average deposit in excess of £41,000.

The main thing to note regarding this particular lender is that it has no legacy lending from the financial crisis and therefore they are free from any ‘toxic debt’. This is due to the fact that it only launched in to the mortgage market in October 2011.

The bank already offers specialist buy to let and commercial loans, is looking to further enhance its offering for experienced property developers.

So recently Shawbrook Bank has announced it is piloting two new mainstream buy to let products with three partner firms, Commercial Processing Centre, The Buy to Let Business and 3MC, before a full launch in to the sector in the autumn.

The commercial buy to let lender hopes by targeting experienced landlords it can offer short term borrowers a longer term option.

Shawbrook Commercial Mortgages sales and marketing director Karen Bennett said “We are doing it on a pilot basis first to make sure we can get the system right and so that the products are competitively priced.”

The first product they are piloting offers loan sizes ranging from £75,000 to £250,000 with a maximum loan to value (LTV) of 75 per cent. Terms are available on two or three years interest only, with a 1 per cent early repayment charge.

The second product uses the same criteria but loan sizes range from £251,000 to £500,000.

Rates for these deals will start at 3.59 per cent over the London Interbank Offered Rate (LIBOR), although the lender has stated that this could change during the pilot phase and may well change before the products are rolled out in the autumn.

Shawbrook Bank managing director of commercial mortgages Stephen Johnson says: “We are really excited about our move in to mainstream buy to let. We want to broaden our options for our brokers and their clients and see the mainstream buy to let offering as an ideal complement to our proposition.”

Some industry insiders believe that this new initiative complements Shawbrook’s core proposition which remains firmly committed to the pragmatic, loan by loan underwriting that is necessary for specialist buy to let, commercial lending and short term loans.

It appears that now more and more lenders are bringing more of the shelf products to the buy to let market and lenders are starting to fight for buy to let mortgages!

In conclusion it seems that Shawbrook has ambitious growth plans for 2013 and beyond.



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