New lenders won't appear before economy settles, warns Yousefi
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MEHRDAD YOUSEFI MARKET MUST WAIT UNTIL 2012
It could be late 2012 before the mort-gage market starts to see new entrants, says industry consultant Mehrdad Yousefi.
He says new entrants will not appear until there is more certainty surrounding the economy, which means a long wait.
Yousefi says: “There is still more demand for mortgages in the UK than there is supply. The top five banks cannot meet all this demand.
“But things are likely to stay the same for some time and it will not be until the end of 2012 that the market sees new entrants.”
Robert Sinclair, director at the Association of Mortgage Interme-diaries, adds that until the sector has absorbed the impact of the government’s spending cuts and rules regarding capital adequacy requirements, it is unlikely we will see any new lenders.
He believes that when new lenders do enter the market it will be a slow and steady trickle and their funding will be limited.
He says: “I don’t expect a lot of change in the number of lenders for the next few years. The regulator wants to see lenders walk before they can run and is taking a slow and steady approach to regu-lation, which is sensible.”
Last week Lord James Sassoon, commercial secretary to the Treasury, called on Indian banks and financial firms to set up in the UK.
He has also called on Indian banks already present in the country to establish themselves more prominently in the UK.
He says: “The UK is home to more Indian banks than any other foreign ones, with nine separate firms operating branches in the country. We have a vital stake in India’s rise to global power and prosperity. This can be further developed with greater integration of our financial institutions.”
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