-- Daniel Flatt
Kensington Mortgages has been forced to temporarily shelve its subprime product offering as mortgage-backed securities investors have continued to shun non-prime paper. The lender said in a statement today, "The global capital market has tightened further and, as a result, Kensington is revamping its Prime proposition and temporarily withdrawing its Adverse range until market conditions improve." The decision comes months after several subprime lenders, including DB Mortgages and Unity Homeloans, withdrew their non-conforming product ranges in August.
Kensington, which launched in 1995 and is one of the U.K. market's most prolific lenders of non-prime mortgages, will withdraw its K1995 special and buy-to-let self-certified product for first-time investors, and removal of the upper loan-to-value bands across the range, including 95% LTV on verified Prime, 90% LTV on Buy to Let, and 85% LTV and 90% LTV on Self-cert. There will also be new prices for self certified products, with fixed rates available from 6.55% and trackers from 6.65%.
Alison Hutchinson, Kensington’s ceo, said: "Demand from investors for adverse credit or high LTV portfolios shows no sign of returning in the next few months, so we have taken the decision to put our Adverse range on ice and revamp our Prime range until the investor market returns."