A new non-bank mortgage lender has entered the market, initially offering residential and buy-to-let products on a pilot basis through intermediaries Brightstar and Mortgage Advice Bureau.
Pepper UK has today (14 January) formally launched Pepper Homeloans, following its acquisition of the UK mortgage servicing business Oakwood Global Finance.
Richard Klemmer, chief executive of Pepper UK, said that initially products will be offered through Brightstar and Mortgage Advice Bureau but it intends to “quickly add further distributors” to its panel throughout the first quarter.
“Our loans are designed for customers who may for a variety of reasons be unable to qualify for a mortgage on the high street. These customers may be buy-to-let investors, first-time buyers or those who require a more customised approach to lending than is currently offered in the market.”
Pepper’s products include residential loans with rates starting from 3.6 per cent and buy-to-let loans starting from 4.35 per cent. All its residential and buy-to-let products will offer the applicant multiple repayment options, including fixed rate terms of up to five years.
Mr Klemmer said that after conducting extensive market research throughout 2014 he was convinced it was the ideal time for us to launch. “Market conditions and economic indicators are favourable and it’s clear there is a place in the UK mortgage market for a new specialist lender.
“The revived securitisation market, the drop in arrears and repossessions, and the intelligence we have gained via Pepper’s vast data from our existing loan servicing portfolios have all given us complete confidence to launch in 2015.
He added that the commencement of lending in the UK is the next step in the group’s strategy of building a global speciality financial services business, adding to existing lending operations in Australia, South Korea, Hong Kong and Spain.
Further announcements regarding Pepper Homeloans’ entrance into the mortgage market will be issued in the coming weeks as it moves out of the pilot phase and expands its distribution capabilities.
The news follows last week’s announcement that Charter Court Financial Services, the holding company that sits behind Precise Mortgages, is set to launch a challenger bank early this year.
Charter said its “lower cost” online and telephone-based proposition will focus on offering “competitive” rates across easy access, notice and fixed rate savings accounts.
The dedicated savings proposition Charter Savings Bank will join a small group of challenger brands who have recently moved into the retail banking space.
Regulators have approved five other challenger banks in the last year: Axis Bank, Union Bank of India, FCMB, UBA Capital and Paragon Bank. It has also has held discussions with a further 25 applicants.
donia.o’loughlin@ft.com
