GE Money Home Lending is the latest lender to dramatically cut its lending in the secured loan sector, leaving just three big players in the market.
Sinclair is confident there will always be a secured loans market but says it could be dominated by a combination of small master brokers and large firms.
He says: “Medium-sized master brokers are going to be squeezed out but the secured loans market will survive. It was down to two lenders in the 1960s – it goes through cycles.”
GEMHL announced it would pull away from the secured loans market last week, although the company will continue to do a small amount of lending through five or six brokers.
Sinclair adds: “I wish GEMHL luck in managing its back book and hope it will stick around and re-enter the market in a big way when the situation improves.”
But there was a ray of hope for master brokers last week as Blemain Finance revealed it has secured new funding and launched an unlimited adverse secured loan product.
Matt Tristram, director at Loans Warehouse, says: “This is the first positive product news in a long time. It offers various options ranging from an adverse plan – which Blemain has not had for a while – to several plans for status customers which we hope will fill part of the gap left by the First National range.”
GEMHL also pulled its First National range from the mortgage market and reduced its distribution from 150 brokers and packagers to less than 20.