View more on these topics

Merrill axes Wave

Rumours are rife in the industry that Merrill Lynch has shut down its remaining UK specialist mortgage lender Wave.

Industry sources say a meeting was held at mid-day in which staff were told that all remaining employees were to be placed on consultation.

Fellow Merrill stable mate Mortgages PLC was axed in April 2008 and Wave had ceased all new lending in May.

Merrill refused to comment on the rumour when contacted by Mortgage Strategy.

The sub-prime lender, originally known as Freedom Lending, was sold to Merrill by Freedom Finance for £25m in July 2006. It rebranded as Wave almost a year later in June 2007.

But problems at the lender emerged only three months after its new name was awarded as Wave was forced to make 20 staff redundant out of its 160-strong workforce.

The emerging unease over sub-prime deals then led to the lender withdrawing much of its sub-prime product range in November 2007, choosing to focus on prime and buy-to-let mortgages instead.

Speculation that Merrill planned to put Wave up for sale, also in November last year, fuelled concerns over what intentions the investment bank had for the UK.

Merrill brought the situation to a head in April this year as it called on Wave to suspend new lending, sparking fears of up to 90 redundancies across the company.

Speaking with Mortgage Strategy last month, Colin Snowdon, chief executive of Wave, said: “I am still in situ as chief executive. Our job is to keep in touch with the market and look for an opportunity to come back.

“When that will be depends on the capital markets opening again, so it will not be in the near future.”

Recommended

MPC


Melanie Bien, Director, Savills Private Finance


Decision: Hold


Which is the biggest risk – rising inflation or rapidly slowing economic activity? Nobody knows, which is why rates are likely to be held at 5% for the foreseeable future. Inflation is 4.4%, more than double the government’s target, because of higher food and energy prices. But the slowing economy means there’s a threat of recession. While inflation may hit 5% in the near term, Bank of England governor Mervyn King thinks it will then fall sharply towards target. This suggests the next move in rates will be downward although that won’t happen yet. Lenders continue to reduce fixed and tracker rates, which is great news, although criteria remain tight. Indeed, some lenders are offering their cheapest rates to those borrowing at 60% or even 50 % LTV. This month I vote for a hold.

Scotland fares better than the rest of the UK

The mortgage market in Scotland has contracted in the past 12 months but it is still faring better than the rest of the UK according to figures from the Council of Mortgage Lenders Scotland.

1

The dynamic duo strike again

So the dynamic duo, Gordy and Ali (the one with the black eyebrows) have devised a cunning plan to save the housing market and the rest of the economy. What is this? To hold Stamp Duty back for a year on properties up to £175,000. Along with this, a raft of previously failed initiatives have […]

Trouble ahead - thumbnail

Pensions: trouble ahead?

The pace of change in the pension’s space has been little short of astonishing, and has left thousands of employers struggling to keep their pension policy compliant, and also on the right side of current best practice and governance. Many employers, and indeed many in the pensions industry itself, would like to see a period of no change during the next term of government. This would give all sides a chance to catch up and draw breath. 

Newsletter

News and expert analysis straight to your inbox

Sign up