Healthy competition on the cards in 2010

25 January 2010

We may all have suffered from the UK’s big chill but from a mortgage industry perspective there have been some positives to kick off the year.

While borrowers and first-time buyers have been dealt a blow with the end of the Stamp Duty holiday and the rise in VAT, 2010 may well be when we see greater competition in the mortgage market. This can only be a good thing for mortgage intermediaries and consumers.

The good news is that product numbers are rising, and not just direct products either.

Mortgage Brain revealed that broker deals are at their highest for a year, having risen 47% in the past six months alone.

In one month (December to January) the number of products increased from 3,337 to 3,534.

Of course, bringing competition and choice back to the mortgage market is not simply a question of product numbers.

We are led to believe that Metro Bank will soon be a presence on the high street while Virgin Money’s recent purchase of Church House Trust puts it firmly on the map. Tesco is also gearing up to make its foray into the market.

The big news for intermediaries will be whether these entrants look to use our sector to distribute their mortgage products. There is no reason to suspect they won’t, particularly if they’re looking for tight control of funding.

Given what has happened recently, any lender not in this bracket is probably not going to last long in the market.

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