The society has revealed it will be launching Godiva Mortgages, a specialist broker-only subsidiary, on March 22.
Colin Franklin, presently head of sales at Coventry, will be managing director of Godiva and the lender will offer a comprehensive range of products for the credit-impaired, self-cert, buy-to-let and 100% plus LTV sectors.
However, following the deluge of specialist entrants entering the market last year some industry experts fear it has not got the capacity to cope with another.
Paul Hunt, head of marketing at Platform, a subsidiary of Britannia, says: “It’s a crowded marketplace at the moment, with so many lenders in the specialist sector. You have to wonder whether this is a sustainable situation.”
And Jonathan Burridge, managing director at Quantum Mortgage Brokers, questions whether the timing is right for another lender to enter a crowded market. He says: “New lenders are always welcome because more lenders must mean more competition.
“But new players must come in with something new to offer – it can’t be just the same old thing.”
Coventry has defended its decision to launch a subsidiary lender, and says it is not merely following in the footsteps of the likes of Britannia.
Franklin says that unlike Platform, which is a totally separate brand from its mutual parent, Godiva is part of the Coventry brand.
And unlike Salt, which Derbyshire launched in November 2005 offering near prime to heavy adverse products, Godiva will not be offering newly designed products but will instead sell Coventry’s existing specialist range.
The products will be sold by the Coventry sales force and advertised on the Coventry website.
Franklin adds: “The introduction of Godiva allows us to make growth plans which we could not make under a society structure.”