Lenders have cast doubts on how successful the new lenders entering the market in 2006 will be.
Speaking at the Jerez Mortgage Summit on June 21, Charles Haresnape, managing director of mortgages at the Bank of Scotland, said centralised lenders dont normally last the term and questioned whether the crop of new lenders jostling for a position in the market would be able to achieve long-term sustainability.
Haresnape says that Bassel II capital requirements and the need for credit systems could also pose a problem for the new entrants.
He adds: While more competition is welcome, the long-term sustainability of securitisation-based lenders isnt proven.
Tim Hague, director of BM Solutions, says that while there is room in the market for competition, he is concerned about lenders getting greedy for market share.
He warns: Lenders dont want other people to come and eat their lunch for them.