Is HBOS too conservative in its lending?

Last week senior sources at HBOS questioned whether the UK’s biggest banks’ conservative approach to lending caused directors at The Mortgage Business to walk.

The past two months have seen a number of changes across the group within TMB, BM Solutions and Halifax.

The bank has also made no secret of its stated aim to reduce income multiples.

So,Mortgage Strategy asks:Is HBOS adopting too conservative an approach to lending?

Linda Will, Accord Mortgages
My understanding of the HBOS group is that its different brands allow entrepreneurial verve to the extent that different approaches to lending can be adopted. For the sake of its reputation and for reasons of prudence it is going to manage levels of business in different sectors and the recent BM Solutions branch closures hint at a more centralised process. But HBOS is too savvy to have distinct brands and not allow them to interpret things in their own ways. The Mortgage Business and BMS could not be more unlike their parent group at times.

Thomas Reeh, Black and White Group
HBOS is being too conservative with its lending approach at present. BM Solutions has boasted about being the sub-prime lender of choice but it has selective criteria and cases must fit perfectly. I am quite surprised by the departures from TMB – you have to ask whether people would have left if they were perfectly happy with the direction the company was taking.

Mike Carpenter, Diamiqe Financial Services
In a regulated age it is important to decipher whether there is such a thing as showing too much caution. It’s natural that some lenders will tighten up to ensure that they are lending responsibly. On the other hand, if lenders set more realistic income multiple levels it will reduce the amount of people trying to wrongly attain self-cert mortgages.

Jeff Knight, GMAC-RFC
I would not class a firm like BM Solutions as conservative – it has been competitive and aggressive in its pricing all year. When you have different brands it allows you to adopt different approaches with them – there would be no point in them all covering the same ground.