View more on these topics

Everyone wants a piece of the action

Think of it what you will, sub-prime business is still booming. Just weeks after Datamonitor reports that the size of the non-standard market has decreased to one in five of the population, Mortgage Strategy can confirm that Lloyds TSB is to make its mark on the market through its retail branch network.

We revealed back in July 2002 that Lloyds TSB was looking to tap into the sector. Now, the high street lender has confirmed that it will pilot a scheme in around 70 of its Lloyds TSB and Cheltenham & Gloucester branches in the key areas of the South-East, North-West and East Midlands.

As we exclusively report on page 4, Lloyds TSB is one of the few high street names yet to make a claim on this lucrative market and it will do so with the help of Preferred Mortgages and Kensington Mortgage Company. It may seem like an unlikely group, but as Simon Biddle, marketing and communications manager for Preferred Mortgages, says: “We were on a beauty parade of lenders and were selected from the shortlist.”

Pundits say Lloyds TSB wants to create a specialist new business operation that will be able to generate profitable mortgage volume from this niche sector.

Secretly, many mainstream lenders have been taking on what would be regarded as traditional sub-prime business on a case-by-case basis, meaning this is not as new an area of the market for mainstream lenders as some may think.

Lloyds TSB spokesman Emile Abu-Shakra says: “There is clearly a growing market there and we are testing it, both to see if we can develop our business and to improve our offering to clients. We are piloting a referral procedure with Kensington Mortgages and Preferred Mortgages, drawing on their experience, to see if this is the best method of entry.”

Other high street players in the market – Abbey National through First National Mortgage Company and Halifax through BM Solutions – have yet to go as far as to offer their products direct. They&#39ll be paying close attention to developments at Lloyds TSB, as will other players in the market.

Lloyds TSB says that it will investigate opportunities for extending any non-standard development to intermediaries pending the success of the pilot.

As we have said on these pages before, with more than 50% of mortgage business introduced from IFAs and advisers, they can&#39t afford not to.

Recommended

Insurance discount helps quality builders

Builders approved under the government Quality Mark will in future enjoy a 20% discount on liability insurance premiums. Insurance costs for all construction firms employing staff have risen sharply in recent years due to factors including the post-September 11 effect and a poor accident record. The industry has made repeated calls for the government to […]

Mortgage Next launches Direct 2 Source service for sub-prime business

Independent mortgage distributor Mortgage Next has launched a new Direct 2 Source service especially for the sub-prime sector. The quantity of sub-prime lending being received through Mortgage Next&#39s specialist packaging facility has increased by 60% year on year. Direct 2 Source enables introducers to send applications direct to a panel of four sub-prime lenders, including […]

Portman appoints director of marketing

Portman has appointed Andrew McQueen as director of marketing. McQueen joins the society on February 3 and will be responsible for all marketing functions within the Portman Group. He was previously at Goldman Sachs and has much relevant experience gained from the publishing, dotcom and financial services sectors. Portman&#39s group development director Matthew Wyles says: […]

Consumers log on to CA website on endowment mis-selling

Almost 400,000 consumers have gone on to the Consumers&#39 Association&#39s www.endowmentaction.co.uk since its launch four months ago. The website offers information on mortgage endowment mis-selling and how to get compensation, and 28,000 people have used the letter generator to draft a complaint. The CA has launched a new questionnaire on its website today to assess […]

How to use wills to protect your clients’ wishes

March was Free Wills Month! Free Wills Month brings together a group of well-respected charities to offer members of the public aged 55 and over the opportunity to have their simple wills written or updated free of charge by using participating solicitors in selected locations around England and Wales. Research by the Law Society* highlighted that only 64 […]

Newsletter

News and expert analysis straight to your inbox

Sign up