LendInvest sells £250m buy-to-let mortgage portfolio at a loss

LendInvest has sold a portfolio of buy-to-let mortgages to digital bank Chetwood Financial for £243m in cash. The AIM-listed mortgage platform said it would continue to manage and service the portfolio following the sale. The portfolio consists of mortgages that were agreed between March and November last year. LendInvest said “the profitability of these mortgages was negatively affected” due to the substantial rise in overnight indexed swap rates and increases made to the base rate, which rose from 0.5% to 3%, following last September’s mini-Budget. The book value of the portfolio as at 26 May 2023 was £250m, which, along with costs, means LendInvest has made a £10.5m loss on the deal. LendInvest said the proceeds from the deal would be used to repay the facilities that financed the assets, allowing the capital to be redeployed as new mortgages with stronger margins. LendInvest chief executive Rod Lockhart said: “This transaction demonstrates our proactive approach to capital management and supports our longer term strategy to manage an increasing proportion of platform assets for third parties. It also initiates a new partnership, adding to a growing list of global financial institutions choosing to back our mortgage products.” To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews