A leading packager has heralded the death of the packaging market.
The source claims lenders no longer need loan origination which means that packagers without sufficient funding to plug the resulting income shortfall are likely to go under.
He says: “There is no future for privately owned packagers. We are hanging on but we’re desperate for cash. There’s no margin and no lenders.
“Why would lenders need to originate with us when they can buy mortgage books for 60% of their value?”
He adds: “Packagers without big parent firms can’t afford to wait for the sun to shine on the market again.”
Patrick Day, managing director of Freehold, says the future of pure packagers is less certain than it is for those with broker arms.
He says: “Obviously the market will shrink as products are withdrawn and I suspect the packagers that survive will be those that morph into broker-based companies.”
But Rob Jupp, managing director of Personal Touch Packaging, says: “Many packagers have scaled back their operations and while some will have to leave the market, plenty will survive the storm.
“The packager quoted seems to be looking at his own bad experience and using it to taint the whole industry.”
PTP processed 700 mortgage app-lications this month, 136% more than in March 2007, boosting the company’s processing volumes beyond the 10,000 mark since it launched.