Secure Trust Bank looks to cease new mortgage lending

Secure Trust Bank looks to cease new mortgage lending

Secure Trust Bank has entered into consultation with its staff on a proposal to cease origination of new mortgage lending.

This action is being taken in light of the current economic climate, increased competition, and pressures on the housing market, according to Paul Lynam, chief executive of Secure Trust Bank.

Secure Trust Bank listed on the London Stock Exchange in October 2016.

Mr Lynam said: "Market pressures show no sign of abating, with competition intensifying, as evidenced by increasing loan-to-value metrics and lower new lending margins.

"Having considered all of these factors, and whilst no final decision has been made, we are proposing to cease origination of new mortgage business until conditions become more favourable.

"This proposed course of action is consistent with our strategy of lending responsibly to build a long-term, sustainable business."

According to Mr Lynam, the mortgage business will continue to operate as normal through the consultation period and during the consultation period there will be no impact on existing mortgage customers or new applications in progress.

Mr Lynam said: "This has been a difficult decision to take and has absolutely no reflection on the professionalism and hard work of our mortgage colleagues or the many organisations they work in partnership with, - a fact that has recently been corroborated by wide ranging external recognition, including a five-star award at the Financial Adviser Service Awards."

According to Mr Lynam further information will be made available once the consultation process has concluded at the end of February.

Andrew Montlake, director of mortgage brokerage Coreco, said Secure Trust Bank looking to pull the plug on new mortgage lending was surprising.

He said: "There will be tougher conditions in the first quarter of this year until politicians sort out what they are doing with Brexit but whatever happens with Brexit the UK is good at bouncing back and adapting.

"I think lots of lenders will be having discussions about how to do lending this year.

"There is a lot of competition at the moment so it is difficult for lenders when it comes to margins."