As volumes increase, more mortgage applications will fall outside high street lenders approval systems, fuelling the specialists’ growth, according to All Types of Mortgages’ managing director.
Speaking to FTAdviser, Dale Jannels doubted whether the forthcoming general election will really impact the housing market, but did agree the bottom line is that lenders need volume and the rates are at their lowest for a number of years.
“With volumes increasing, this means that we are likely to see more cases falling out of the high street lenders ‘tick box’ approval systems. This in turn will feed the specialist lender community - who will consider thinking outside the box, assessing more complex scenarios and accepting many different types and levels of adverse.”
Mr Jannels said this has been one of the biggest areas of growth Atom has experienced over the last twelve months and he believes more lenders are looking at these areas, as well as new lenders looking to launch in these limited product niches.
“Today, a first time buyer, buying a new build property, who has had a few credit issues in the past (normally a CCJ or default up to £1,500) can achieve a rate circa 3 per cent. This is a huge improvement on even just what was available a matter of twelve months ago.
“Adverse, non-conforming, sub-prime, near prime, whatever you want to call it, is on the increase and customer demand for this type of funding has put pressures on lenders to respond. For the right customer, right credit score and ability to pay back the loan, there are now an increasing number of options available.”
Mr Jannels stated that the same goes for the buy-to-let sector, which, while not as readily available as a residential mortgage option, appears to be the next in line for lenders to help those who have had a credit blip or two.
“We could look at this as a bit of de ja vu from pre credit crunch times. Today lenders are in the midst of a price war across the market. The battle ground can really only then change to criteria and which lender can offer the most competitive and cost effective criteria niches.
“We’ve been there before and, some would say, are only just recovering. So it will be interesting to see what the regulators stance will be on this, whilst also trying to keep the markets very fragile wheels in motion.”
He added that the European Union Mortgage Credit Directive is only just around the corner, bringing more raised eyebrows and possible hesitations on lending towards the latter part of 2015, but for now all is positive.
“Volumes are on the increase, more product options are available than there has been for some time and consumer confidence is very high; the future is looking busy.”
peter.walker@ft.com
