Allica Bank will enter the buy-to-let residential market and plans to lend £100m to landlords before the end of the year.  

The small business-focused lender says its new service is aimed at professional real estate investors and intends to fund residential BTL portfolios, houses in multiple occupation and multi-unit freehold blocks.

Its pricing offers brokers up to 75% loan-to-value on loans between £250,000 to £10m, from a 5.80% fixed-rate. 

Discounts will be applied to larger loans or energy-efficient properties and debt service cover ratios have been set lower than the rest of the term commercial investment mortgage range at 110%, or 125% for higher-rate taxpayers.   

Previously, the lender founded in 2019, had focused its lending across commercial mortgages and asset finance. 

Allica Bank chief commercial officer Nick Baker says: “The introduction of specialist BTL mortgages is in direct response to market demand and we have set ourselves a hefty target of £100m before the end of the year, a target we have a hefty desire to significantly exceed.”