Entrants increase non-conforming pressure
Mortgage Introducer has learned that one or two of the existing lenders within the non-conforming market have started to worry about their margins as the new players begin to make an impact, with Mortgages plc seeing record growth since being acquired by Merrill Lynch.
This competition is set to heighten even further later on in the year as the likes of Oakwood and db Mortgages establish their propositions.
MI was told: “One lender is starting to feel the pressure of competition but September or November, will be when the real pressure will be felt as more new lenders enter the market.”
Peter Beaumont, deputy CEO at Mortgages plc, said: “Last year we more than doubled our volume and this has continued with an amazing first quarter this year. Even in April, which was a short month, we wrote 15 per cent more business than in March so we are really pleased.
“We’ve heard that we are starting to hurt some of the other players but we are pricing aggressively, covering more areas than before and our sales staff are working incredibly hard so it’s not surprising we’ve seen phenomenal growth.”
However, Ian Giles, director of marketing at Kensington Mortgages, believed that the non-conforming market was going according to how people expected it to.
He said: “It’s not unexpected as when we were planning we saw 2006 as a year of great competitiveness in the market. The new lenders are not doing anything we weren’t expecting them to do and it’s not unexpected that they are using prices as a way of getting into the market. However, people get obsessed with this week’s news. We aren’t worried as we are well established in the market and we will do whatever we need in order to remain competitive.”