New players to enter mortgage market
One of these lenders is believed to be a major new intermediary focused lender “from the East” which is due to enter the market in the autumn. Another smaller buy-to-let lender has also been mooted as well as at least one other specialist player. Meanwhile several potential new bridging lenders are also thought to be chomping at the bit to play in the sector once funding has been secured.
Whilst sources were not prepared to have the name of the “big” foreign lender in question placed on record they did say that they were expected to make significant inroads into the intermediary sector.
The potential addition of a number of new lenders has been welcomed by both the intermediary sector and the wider mortgage market.
Rob Clifford, chief executive at national broker If I Were You, said: “Brokers and consumers alike should welcome new lenders as increased consumer choice is a key objective of this regulatory regime.
“At If I Were You we think this is great news as we have always paid particular attention to new entrants and in fact we have been involved in pilots, such as when Virgin Money first opened up to the intermediary market.”
But Clifford warned that any new entrant to the market would have its work cut out for it.
He said: “What will be key for this new lender’s success is to have a clearly differentiated proposition – either for brokers or borrowers – as it is now a crowded sector with arguably some over-supply, which makes it tough for a new name to seize market share.
“I’m hopeful indeed that this new player has a clear view of how it will stand apart from the crowd and impress consumers and advisers alike.”
John Grimbaldeston, director of products and marketing at HML, also welcomed the potential addition of the new lenders but warned that they will face a number of challenges before and after their launch.
He said: “There are a number of key challenges that face any new lender looking to enter the market. One of the major challenges is the emergence of MMR and getting the right permissions from the regulator.
“Lenders also need to gear up for origination and work out how to maximise the opportunities that are available in the current market.
“What is clear though is that the timing is very opportune. The availability of cheap funding lines and schemes such as Help to Buy and the Funding for Lending Scheme means that the UK mortgage market is a very tempting proposition.
“The market is very encouraging at the moment but any prospective new lender must be aware of the challenges that lie ahead.”