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Niche lenders get survival warning

Lenders that focus solely on the specialist mortgage market are at risk of marginalisation and will struggle to survive, GMAC-RFC has warned.

Speaking at the Council of Mortgage Lenders funding summit this month, Stephen Knight, executive chairman of GMAC-RFC, told delegates that investment banks lending in the UK market must address the entire mortgage spectrum if they are to succeed.

His comments came during a debate at the second annual event over whether the next logical lending step for investment banks is to go into prime lending.

Toni Moss, partner at EuroCatalyst, says despite slim margins in prime lending, investment banks are well placed to overcome this and be profitable because of their economies of scale and cost efficiencies.

She adds: “Lenders have to have lots of volume to be profitable because of slim prime margins but we’ve seen them going into prime lending in other countries so why not in the UK?”

But Greg Kohansky, director of Fitch Ratings, argues that investment banks are more likely to move into other parts of Europe before they look to prime lending in the UK.

Knight says: “It can be done. Lenders can’t get traction by only being in the specialist sector. Mainstream lenders are pushing into the specialist sector and sub-prime lenders that ignore prime lending are exposed to marginalisation. Their survival is in question if they don’t address the entire lending spectrum.”


Bank of England increases interest rate to 5%

The Bank of England’s Monetary Policy Committee has increased UK interest rates to a five-year high of 5%, up from 4.75%.Matthew Wyles, group development director at Portman, says: “This rate increase was a racing certainty and has already been factored into the pricing of most fixed rate mortgage products. “It’s clear that the MPC intends […]

Nationwide increases SVR

Nationwide has confirmed it is increasing its base mortgage rate from December 1 by 0.25%.The BBR will increase from 6.24% to 6.49%, although the lender says it is still around 0.50% lower than the SVR of most other major high street lenders assuming that they also increase their SVRs in line with the base rate. […]

MBUK launches remortgaging scheme with LMS

Mortgage Bureau UK has launched a Treating Customers Fairly remortgage scheme in partnership with LMS.The service gives the packagers consumer customers telephone support and help in filling in forms, coupled with high-speed conveyancing and case tracking for 199.The TCF remortgage scheme has been tailor-made specifically for Mortgage Bureau by LMS using its unique technologies, dedicated […]

Hamptons comment on rate rise

Jonathan Cornell, technical director at Hamptons International Mortgages, says: This was a widely expected decision and no one should be surprised. This latest base rate increase, combined with the August rise should start to put the brakes on house price inflation.The MPC has been very successful over the past couple of years at keeping inflation […]

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Global benefits predictions for 2015 from Jelf International

According to Doug Rice, managing director of international services, in 2015, managing their international duty of care will become an increasing focus for UK-based overseas organisations in both managing their short- and longer-term challenges. As a result, strong independent advice and innovative technological solutions will become more important than ever in managing their global benefits.


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