It targets £100 million in specialist BTL mortgage offers by year-end
Allica Bank has expanded its commercial mortgage offering by entering the specialist buy-to-let residential market.
The move comes in response to broker feedback and rising demand for specialist property finance, with the challenger bank aiming to deliver £100 million in specialist BTL mortgage offers by year-end.
The new proposition targets professional property investors and businesses seeking finance for residential BTL portfolios, houses in multiple occupation (HMOs), and multi-unit freehold blocks (MUFBs).
Loans will be available from £250,000 to £10 million, with loan-to-value (LTV) ratios of up to 75%. Fixed rates will start at 5.80%, with discounts offered on larger loans and energy-efficient properties. Allica has set lower debt service cover ratios (DSCR) than its wider commercial investment mortgage range — 110% for standard taxpayers and 125% for higher-rate taxpayers.
“Our job has always been to listen to what our brokers are saying and provide a proposition that meets their needs and those of the established SMEs that they serve,” said Nick Baker (pictured), chief commercial officer at Allica Bank. “The introduction of specialist buy-to-let mortgages is in direct response to market demand, and we have set ourselves a hefty target of £100 million before the end of the year, a target we have hefty desire to significantly exceed.”
The launch follows a period of sustained growth for Allica Bank. The lender surpassed £3 billion in loans to established SMEs last year and completed its acquisition of bridging lender Tuscan Capital, marking its entry into the bridging finance sector. Earlier this year, Allica also cut rates across its commercial lending products and updated its bridging finance offering.
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