Permanent TSB restricts UK lending as Irish rate hike expected
Permanent TSB has moved to restrict lending in its UK buy-to-let mortgage business, taking its lead from a slew of other lenders in Britain as the credit crunch continues to take its toll.
Separately, it is understood the lender will today become the latest player in the Irish market to signal an increase in rates to new mortgage borrowers. This follows similar moves by a number of other lenders this week, including Bank of Scotland (Ireland), Ulster Bank and its sister, First Active.
Permanent TSB already withdrew its one-year fixed-rate mortgage this week and increased the rates it charges on its two-year fixed-rate product.
Permanent TSB's UK arm, Capital Home Loans (CHL), informed UK mortgage brokers yesterday it will only offer buy-to-let loans of up to 80pc of the value of property from Monday. Permanent TSB is, in turn, a subsidiary of Dublin-listed Irish Life & Permanent.
CHL is suspending, as of the same date, all mortgages to new builds, which it defines as houses and flats built or converted within the last 12 months.
Regarding mortgages that are currently in the pipeline, the lender said would-be borrowers who have not yet been "approved in principal" must submit all documentation by next Friday to be considered.
Where loans have been approved, all outstanding items received for a loan offer must be in by the following Friday. Loan offers for new-build properties will only be valid for three months, it said.
Struggled
Meanwhile, Bank of Ireland will this morning relaunch its mortgage range in the UK, having temporarily pulled its products last week as it struggled to cope with "record demand" for its products.
The availability of mortgage credit has been drying up rapidly in the UK in recent months.
Sixteen buy-to-let lenders have pulled mortgages to landlords in the past few weeks. While there were 1,539 mortgage products available in the UK buy-to-let market a year ago, that figure has shrunk to 620, as of yesterday. At the peak of the market last summer there were 3,662 buy-to-let products.
A number of lenders have slashed the maximum they will lend on new builds to as low as 50pc of the value of the property.
- Joe Brennan and Charlie Weston
