Heavy adverse market ‘to disappear’

As non-conforming lenders have rushed to shield themselves from risk by reforming criteria and hiking prices, brokers have been struggling to find suitable products.

However, it is at the heavy end of the market where the greatest concerns lie, it has been claimed, with brokers fearing for the future of the sector.

David Mead, managing director of Flexible-mortgage.net, commented: “My biggest concern with most of the non-conforming lenders raising rates is that affordability models at the difficult end are not working any more. Those who have to apply for a mortgage or remortgage now won’t get anything and this will impact on the repossession rates.”

His sentiments were echoed by Stephen Brown, senior technical director at MoneyQuest. He said: “The more vulnerable clients are less aware of what is going on at the minute and the repercussions on their situation. Some will disappear out of the market as they won’t be able to get finance. Remortgages are a bigger worry as these people might have got themselves into a hole and will have real issues trying to consolidate.”

Darren Pescod, managing director of The Mortgage Broker Ltd, said:

“Will all the price hikes have an effect on business? It’s a bit early to tell anything definitive but the conversion rates have certainly dropped slightly in the last four weeks. People are coming to us and want too much and can’t get it or they are looking to refinance and the deals just aren’t competitive.”