Catt, whose firm Hometrack produces automated valuations, discussed the rise of challenger banks pushing the boat by focusing on niches in the market and investing in technology.
Hometrack’s chief operating officer David Catt expects the likes of Apple and Amazon to become banks and compete in the mortgage market.
Catt, whose firm Hometrack produces automated valuations, discussed the rise of challenger banks pushing the boat by focusing on niches in the market and investing in technology.
While he agreed the likes of Atom Bank, a digital bank launching in the summer, will force major lenders to respond, he reckoned the real competition will come from players like Apple and Amazon.
He said: “For big banks the biggest threat comes from Amazon or Apple Bank.
“They’ve got more capital than many banks put together and they’re more trusted by consumers.
"They will want to keep growing. Currently they see themselves as facilitators but what happens when they want to play centre forward?”
On mortgage interest rates Catt reckoned the market is at “the low point”, however he doesn’t expect them to rise significantly any time soon.
He added: “Rates might creep up, but the big guys can’t up them too much because of the threat of challengers.”
Last month Lloyds Banking Group’s director of strategic partnerships Esther Dijkstra talked up changing mortgage criteria to fit regional variations in the market, for example by offering more interest-only solutions in London because of the divide between house prices and earnings.
Catt felt this demonstrated that big players will start following challengers in offering tailored lending solutions going forward in a bid to widen their “wafer thin” margins.
