TSB confirms sub-prime entry

Lloyds TSB is to take its first steps into non-standard mortgage lending next month after agreeing a pilot referral deal with Kensington Mortgage Company and Preferred Mortgages.

Lloyds TSB is one of the few high street names with no presence in the non-standard mortgage market but the pilot, set to run from the end of February until August, will involve around 70 Lloyds TSB and Cheltenham & Gloucester branches in the SouthEast, North-West and East Midlands. It is understood products will cover light adverse borrowers.

Mortgage Strategy exclusively revealed that Lloyds TSB was looking to enter the non-standard market in July 2002.

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

Simon Biddle, marketing and communications manager for Preferred Mortgages, says: “Preferred was on a beauty parade of lenders and was selected from the shortlist. We are delighted to be taking part in this pilot and are looking forward to working on a successful project.”

However, the proposal to offer direct referrals to Kensington and Preferred has been greeted with anger by some intermediaries.

Brian Collinson, director of Worcester-based IFA Lighthouse Trinity, says: “We do a lot of business with C&G but if it is going to play that game and go direct to lenders like Kensington and Preferred we will stop doing so.”

•See Cover Story, page 22