Over the last 10 years, the specialist lending sector has been growing and represented about one-third of the 2007 gross lending figure. That is more than £100bn of buy-to-let, self-cert and adverse loans in one year alone.
These are the borrowers most likely to have difficulties with mortgage payments, yet no government aid has gone to them.
Specialist lenders are not included in any government plans, so virtually no products are available and there aren’t any remortgage opportunities or capital-raising opportunities.
So this group of borrowers will have to sit on lenders’ SVRs, many of which are linked to LIBOR not the Bank of England base rate, and this is likely to lead to further arrears and repossessions.
Private landlords who have been improving the standards of rented property will be left out in the cold. Millions of self-employed people will be classed as the mortgage market’s untouchables. And those without perfect credit histories will be virtual mortgage lepers.
The government’s failure to acknowledge specialist lenders and borrowers will lead to a two-tier system and consumers consigned to the mortgage market’s equivalent of the scrap heap.