I disagree with this extreme position. My guess is that around five or six network mergers will take place in the next 12 months.
A number of networks – especially small to medium-sized ones – are operating in a comfort zone. They have no intention of selling up and are content to carry on as they are, despite the tough market conditions.
Meanwhile, among the networks that will look to sell up, some will stubbornly cling to unrealistic prices only justifiable by business volumes achieved in 2007. But those days are now behind us and they are unlikely to return for years.
So I predict half a dozen mergers in 2009. As the largest mortgage network we will play our part in this, taking advantage of cost-saving opportunities.
Are we about to enter an era of lenders taking stakes in mortgage distribution channels including networks, clubs, packagers and business-to-consumer intermediaries?
Precedents are few and far between and largely confined to medium-sized building societies and centralised lenders. Not all of their experiences have been satisfactory.
If anything, we are more likely to see life companies continuing to take an interest in channels that can secure them more life and investment business.