The UK buy-to-let market must have signs of life, strong enough to be perceived even from overseas, because – hot on the heels of the Aldermore news – a new lender has entered the market this week.

Precise Mortgages is the trade name of a new mortgage venture backed by American private equity. The backers are NY-based investment firm Elliott Associates, recently linked with a bid for IT technology company Novell.

Starting this month (May 2010), they'll be offering three different buy-to-let mortgages, starting from a rate of 5.79 per cent at 75% loan to value. That rate is devised by adding 5.15 to LIBOR over a two-year tracker deal.

A downside for larger value loans is the 2.5 per cent arrangement fee, which needs to be paid straight up – rather than added to the loan – which will eat into the deposit a little. And this new venture won't appeal to professional landlords yet, as there is a limit of one property per investor. New-build properties are also disallowed.

Precise Mortgages has not unveiled any owner-occupier mortgages, but if you're a buy-to-let property investor this will add to your options. You'll have to arrange a quote through one of their panel of intermediaries, which includes L&G Mortgage Club, Mortgage Intelligence and Mortgage Next.

A new lender enters the UK mortgage market this week, making the most of all the savings money it has accumulated in the last 9 months.

The new entrant is Aldermore Bank. It's not a new entity: formerly known as Ruffler Bank, which for three decades lent mainly to businesses importing gaming machines from overseas, the bank was taken over last year by the venture capital firm AnaCap Financial Partners. With it came a name-change, and Aldermore Bank started offering saving accounts in summer 2009, making a name for itself with several best-buy table appearances on fixed term savings bonds.

Now, the bank has started lending on residential mortgages – including buy-to-let.

Buy-to-let investors who don't mind chancing it on the base rate might try their two-year discount mortgage from 4.98 per cent. Three and five-year fixed rates are available from 5.78 per cent. Excluded are new build homes and multiple property purchases.

To obtain an Aldermore mortgage means going through one of their intermediaries: L&G Mortgage Club and Mortgage Intelligence are among the names, as is Mortgages for Business.

Number of fixed-rate mortgage deals at 90%+ loan-to-value has almost doubled in a year

There are now 147 fixed-rate mortgage available if you have less than 10 per cent deposit — an 88% increase on the 78 products available in February 2009.

Speaking of fixed rate mortgages generally, not just high LTV, the increase is more modest: 46% more products than at this time last year. The average loan-to-value on a fixed-rate mortgage is up 1.3 percentage points to 76.8%.

Tracker mortgage borrowers, however, are not so well served at high loan-to-value ratios. The number of tracker mortgages with a loan-to-value above 90 per cent grew only slightly, from 43 to 51 in the last twelve months.

Today, Skipton Building Society (89 branches, 830,000 members, the UK's fourth largest) takes over Chesham Building Society (3 branches, 20,000 members, one of the smallest — and, established in 1845, the UK's oldest).

Background to the Skipton takeover of Chesham Building Society

Despite the ongoing furore about Skipton's "exceptional circumstances" SVR increase for existing mortgage borrowers, it seems to be trading nicely: yesterday it announced pre-tax profits had recovered from £22.5 million to £63.5 million.

Not such a rosy picture for The Chesham. After 165 years, world wars and depressions, the UK's oldest building society, after operating at a loss last year, finally raised the white flag at 2010's economic and interest rate conditions.

Where's Chesham, by the way?

The society is based in Buckinghamshire, in the three commuter towns of Chesham, Aylesbury and Little Chalfont, with an agency in Tring, Hertfordshire. Skipton has promised to keep all four open for at least 12 months.

No perks, but some drops in mortgage rates 

Chesham members don't receive much in the way of perks from the takeover. They get to use Skipton's branch network and that's about it. However, some Chesham mortgage borrowers will see their rates drop by 1.5%.

Skipton borrowers frustrated? 

If we had a Skipton building society standard variable rate mortgage and found out our rate had just increased 1.5% because of "exceptional circumstances", we'd be infuriated to find out the society is at the same time increasing profits, splashing out on a takeover and giving certain Chesham borrowers a 1.5% mortgage rate reduction. Wouldn't you?

Santander cuts its fixed rates today by up to 0.40 per cent

Responding to a general increase in mortgage market competitiveness, Santander has trimmed the rates on its five-year fixed rate mortgages by up to 0.25 per cent. The range includes a 4.99% deal for purhases only (70 per cent LTV limit, £995 fee), or 5.15 per cent for remortgage customers (75 per cent LTV limit, £995 fee).

Santander tracker mortgages also get trimmed by up to 0.40. We supsect the Spanish megabank might have further cuts up its sleeve, but for now these deals represent a good show for borrowers looking for medium-range rate stability on purchase mortgages.

High LTV mortgages not just for first-time buyers

Newcastle Building Society today launches mortgages for up-to-90-per-cent LTV borrowers. They're not only intended for first-timers into the housing market, but also for purchasers looking to move on up. What they won't cover is remortgagers looking to increase their borrowing and make up for reduced equity.

The range includes a 2-year tracker mortgage at 4.60% (cheap for such a high LTV, but with a high margin over base rate). There's also a 2-year fixed-rate at 5.95%.

Qualification for these mortgages is measured on income multiples: 3.25 × salary for a single borrower or 3 × joint salary for couples.

It looks like the society has taken pity on struggling would-be first time buyers: "Conditions in the mortgage market have been very difficult for sometime, and they have had a particular impact on the first-time buyer market, where numbers across the UK have fallen year-on-year by around four per cent,” commented their spokesman Steve Urwin.

If you're an owner occupier but you decide to live elsewhere for a short while, most people would assume it's OK to rent out your home.

However, on a residential mortgage you need what's called "consent to let" from your mortgage lender — and they're making it more difficult to let out your existing property in this way.

Lenders are beginning to charge higher fees, make you jump through hoops, or refuse to consent at all. Contrast this situation with the buy-to-let boom years when, in lenders' eyes, there was nothing wrong with short term letting as long as the mortgage repayments were kept up.

Previously, you might have faced a £100 admin fee at most. Now, your lender might require you to:

• attend interviews

• pay a higher interest rate or fee

• move to a buy-to-let mortgage deal

Buy-to-let mortgages typically have higher interest rates and stricter qualifying criteria than residential mortgages, meaning #3 there is as much an obstruction as #1 or #2.

Here are some specific mortgage lender illustrations:

• Intelligent Finance charges mortgage borrowers a lease fee of 0.5 per cent of the outstanding mortgage every six months — a significant extra cost for borrowers (on a £100,000 mortgage that's nearly an extra £1,000 a year).

• Yorkshire Building Society asks a £100 administration fee and puts up your mortgage interest by 1% if your loan-to-value is over 75 per cent

• Northern Rock avoids giving consent at all if your loan-to-value is above 70 per cent.

• Abbey interviews borrowers before giving consent and is likely to request borrowers to move onto a buy-to-let deal

• Halifax also demands an interview; borrowers must move on to a specific consent-to-let rate, priced similarly to a buy-to-let deal

However, some lenders are not so draconian:

• Nationwide has been known to agree three-year letting periods at no extra cost

• HSBC lets you rent out your property for 12 months without any extra charges

• Northern Rock charges £250 to allow you to let your property over 12 months

Warning if you're thinking of letting on the quiet

If all these restrictions tempt you not to tell your lender about letting out your property, be prepared for a penalty: on a residential mortgage you'll be in breach of your mortgage conditions, which affects your tenant as well as yourselves. Jump through hoops for a fair deal you might, but it's better than having your mortgage cancelled.

The other party to inform when letting out your property is your home insurer: without notice, they could invalidate your policy in the event of a claim. A tenant might not take the good care you do, so being uninsured is not something we'd want to face!  

Wales' principal building society approaching its anniversary relatively free of struggles

While many building societies are struggling to balance the demands of savers and mortgage borrowers — with some looking to merge and others simply losing custom to the banks — Principality is one society that looks a little bit different to its competitors at the moment.

Funnily enough, that's because it's still doing most of what kept it going for 150 years. Established in 1860, Principality still lends mainly against its savers' deposits, and sticks wholeheartedly to the mutual society principle.

There's a secret to how Wales' No. 1 building society achieves this, and it's just that: being Wales' No. 1 building society.

It quite simply takes a lot to make the patriotic Welsh go elsewhere. Their savers are less prone to flight than most. Their mortgage customers have stuck with the society on a 4.99% standard variable rate (Nationwide's has been 2.5% for most of the last year). 

All this has helped Principality build up an aura of stability, which continues to attract savers (a 6.63% increase in deposits during 2009).

Strong savings deposits in turn encourage competitive mortgage pricing. At the time of writing, Principality is offering a 2-year fixed rate mortgage of 3.89% with no fees — a best buy option for many. Tracker mortgages start from 2.69% (base + 2.19% for two years, with an admin fee of £999) and can accommodate up to 85% loan to value.

Being one of the few building societies to achieve a net savings inflow during 2009 shows that Principality's old fashioned business model has a lot to recommend it. Now mortgage customers as well as savers have special reason to beat a path to their door.

Skipton Building Society hikes its mortgage SVR by over 1 percentage point, affecting thousands.

When you're a mortgage customer sticking to your building society's Standard Variable Rate, you expect the rate to move only in line with the Bank of England Base Rate — as it has done for years.

You don't expect it to suddenly lurch upwards when the Bank of England's rate has been static for months.

You especially don't expect the rate lurch when your mortgage lender offered a guarantee that its SVR would never be more than three points over base.

That's why it's odd, unprecendented and downright frustrating that Skipton Building Society has chosen this month to invoke 'exceptional circumstances' and impose a huge rate increase that will affect over 60,000 mortgage customers.

Skipton Building Society's SVR is rising by 1.45%, to 4.95% on 1st March 2010.

The decision is being communicated to thousands of mortgage holders by post. By any measure, 1.45% is a huge sudden increase. Some will face monthly repayment increases of £400 or more.

Imagine having to find £400 extra a month at the stroke of a pen. Even the average mortgage borrower is in line for a £100 increase in interest.

It's a 'realignment' for the benefit of all members, we learn…

…and it's no wonder that Skipton Building Society's website is promoting its Fixed Rate ISA at the moment. Meanwhile tucked away on its mortgage pages are some FAQ (distilled here):

• Why now? — they have defined 'exceptional circumstances' to include phases such as these where the base rate is low (Goes to show: a 'guarantee' is not necessarily a guarantee… have you read all the clauses?)

• Why at all? — to protect savers. Actually, the phrase used is "to enable us to continue balancing the needs of our borrowers and our savers for the long term".

• Why so much at once? — Good question. It seems all those months of restraint had built up into a bubble of frustration.  After all, as Skipton repeatedly points out, its SVR is still below average for the sector.

The thing is, although 4.95% for an SVR is by no means bad, I'd love to have been a fly on the wall when they took the decision, presumably overriding any concerns about how individual mortgage customers (who, let's face it, may be fairly stuck in the current LTV climate) would cope with such a dramatic increase.

This is a story we surely haven't heard the last of. 

Yorkshire and Chelsea building societies are planning a merger that has just been approved by both sets of members.

If the formalities go ahead, the resulting building society will be the UK's second largest after Nationwide, with combined assets around £35bn.

Yorkshire BS currently occupies the #2 spot on its own, with 2 million members, while Chelsea is #4 on the list largest with approximately 700,000 members.

Why are the two societies merging?

According to a Chelsea spokesperson, simply as part of a "strategic review" — to plan for the future, that sort of thing. Although according to Mike Davies, head of mortgages at Skerritt Consultants, "both companies have not been able to lend as much as they want to and will need to merge to continue functioning."

The new society will also include Yorkshire's dormant specialist lender, Accord Mortgages.

As with most mergers, we're not expecting anything particularly exciting to happen as the deal is trodden out, but it's predicted the process will be complete by April 2010. If they do decide to change the name to Yorksea or Chelshire, we'll let you know.