Kensington Group’s exposure to the Irish market has led to a quarter of its mortgage book falling into negative equity.
Its parent company Investec revealed in its accounts that Kensington Group, which incorporates Kensington and Irish lender Start Mortgages, had 24.4 per cent of its loan book at an LTV of more than 100 per cent and 42.2 per cent at an LTV of more than 90 per cent as at March 31, 2011.
This compares with 11.5 per cent of the book being at an LTV of over 100 per cent and 31.1 per cent at an LTV of over 90 per cent in March 2010.
Kensington says the increase in high LTV loans is due to Start’s exposure to the Irish housing market, which has collapsed since the financial crisis.
Latest figures from the Central Statistics Office show that property prices in Ireland fell by 1.6 per cent in August a year-on-year fall of 13.9 per cent.
House values in Ireland are now 43 per cent lower than they were at their peak in early 2007.
A spokesman for Kensington says: “While Kensington¹s portfolio is performing well and has seen strong positive improvements in 2011, Ireland¹s economy is clearly enduring a difficult time.
“Since taking 100 per cent ownership of Start Mortgages in June this year we have been using our expertise in customer management to work to help it in this challenging environment.”
The accounts also reveal that the proportion of Kensington Group’s loans that are more than 90 days in arrears is 31 per cent, up from 28.4 per cent in 2010.
But they show that impairment losses and advances relating to Kensington amount to £69.9m, down from £81.2m in 2010.
The results say: “While we have seen an improvement in arrears in our UK portfolio, impairments against our Irish portfolio have increased.”