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AVS not all it’s cracked up to be

Earlier this month the Council of Mortgage Lenders held its mortgage arrears and repossessions conference. Along with interest-only, one of the key topics for debate was assisted voluntary sales.

AVSs are not a new idea and essentially allow some borrowers to get support from their lender to sell their property and avoid possession.

But as Connells Asset Management’s operations director Teresa Scales describes in this week’s Lending Zone on p29, AVSs are not the ideal solution sometimes portrayed by lenders, with schemes prone to problems and challenges mainly with the ongoing housing needs of the borrower.

As a result, she says, the take-up among borrowers has been low. Some lenders have talked of large percentage increases in the borrowers using AVS, but sceptics point out that with precise figures rarely illustrating the headline percentage increases, it’s likely that any spike upwards has been from a low base.

Scales’ company Connells portrayed a potential solution and it will be interesting to see what effect it has on the wider market.

Meanwhile, in our main cover story on p26 Edmund Tirbutt looks at the impact new entrants have had on the market.

Not much, is probably the instinctive reaction from most people in the market. But the so-called challenger banks have had a tough situation on their hands. With wholesale markets closed and new investment scarce, new lenders have had to work from the bottom up.

Aldermore Bank has had a strong stab at it and has recently launched a range of NewBuy products – in which only the top five largest lenders have so far shown any interest.

But ultimately it seems that, with the stagnant state of the market, any growth from new entrants will be slow.

As Precise Mortgages’ managing director Alan Cleary puts it, with some of the larger lenders having been in existence for hundreds of years, anyone who thinks that the new entrants will change the status quo is going to be disappointed.


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