Starling Bank has bought buy-to-let specialist mortgage lender Fleet Mortgages for £50 million, marking the beginning of the FinTech challenger's wider acquisition and growth strategy.

The mortgage company, based in Hampshire, focuses on providing mortgages to professional and semi-professional buy-to-let landlords, only via mortgage adviser distribution channels.

To date, it has originated £2.3 billion of mortgages and experienced zero credit losses. It currently has more than £1.75 billion of mortgages under management.

Starling will become the sole funder of future originations, with Fleet Mortgages able to build on its successful lending operation by accessing Starling’s growing deposit base.

Day-to-day operations at Fleet will continue unchanged with the company’s existing and highly-respected management team.

The acquisition is Starling’s first and part of a wider plan at the bank to expand lending through a mix of strategic forward-flow arrangements, organic lending and targeted M&A activity.

“The acquisition of Fleet Mortgages is the start of our move into mortgages as an asset class and builds on a number of forward-flow arrangements that we’re doing with leading non-bank lenders,” said Anne Boden, chief executive, Starling. “Fleet’s existing management team will remain in place and Fleet will continue to operate as a stand-alone company, keeping the original name and brand. We’re buying Fleet because it is very good at what it does, not because we want to change it.”

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