Masthaven's foray into secured loans likely to be copied by other bridgers
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More bridging lenders are being tipped to enter the secured loan market this year, following Masthaven’s planned launch into the sector.
The bridging lender last week revealed plans to enter the sector in spring, offering loans between £5,000 and £100,000.
It has appointed Stuart Aitken, former director at Concert Mortgages and Southern Pacific Mortgages Limited, as chief operating officer to oversee the launch.
Matt Tristram, director at Loans Warehouse, expects other bridging lenders will follow suit.
He says: “Masthaven has a good reputation and it’s great that it is launching into the sector. I would expect a lot of other bridging lenders, especially the larger ones, to follow.”
He says there are also rumours some previous lenders from the secured loan market could re-emerge.
He adds: “The secured loans market is under-saturated. It is an easy sector to enter and there is the opportunity for a new entrant to make an impact.”
Figures published last week by the Finance and Leasing Association show secured lending business totalled £20m in December 2011, up 11% from December 2010.
Annually, there was £286m of secured loan business in 2011, down 3% on 2010.
Steve Walker, managing director of Promise Solutions, says although new entrants are expected in 2012, lending volumes will not pick up until aspirational borrowers return to the market.
He says: “I think the market will see a mixture of new entrants this year - some will be totally new while bridging lenders may look to extend their product offering to secured loans. But this will not necessarily result in growth. We are still dealing with borrowers who need to borrow, not those who are doing it out of choice.
“A lot of lenders are moving into the existing space and not offering anything new, which means they are just taking away business from existing lenders.”
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