Intermediary lender Kensington has resumed new lending with a prime mortgage through Legal & General, Pink Home Loans and Openwork, it has been revealed.

The Investec-owned lender once lent to sub-prime and self-cert borrowers but had to withdraw from new lending in late 2008, when wholesale funding dried up as a result of the credit crunch.

It has now launched a two-year income verified fixed rate up to 65 per cent LTV. The rate is 5.69 per cent and the arrangement fee is £1,299.

Although the product is described as prime, it may allow borrowers who have County Court judgments, arrears or defaults, to access loans.

Kensington head Keith Street stated: “Kensington has returned to the intermediary mortgage market, offering prime products through a controlled distribution.

“The whole landscape of our industry has changed in the past two years and we have evolved to meet those changes.

“We have combined our expertise with the experience and strengths of our parent, Investec, and are ready to improve supply and choice for customers.”

Ben Thompson, director of Mortgages at Legal & General said: "The return of Kensington is great news and we're pleased to be working with them. This is an indication that lenders who have been on the sidelines now want to get back in on the action where possible.”