The lender is thought to be on course to come to market with the product in Q1 2007.
A source, who wished to remain anonymous, told Mortgage Introducer: “Alliance & Leicester is currently working to launch a 125 per cent product that connects a secured mortgage with an unsecured loan in February next year. This would make it the latest lender to join the likes of Northern Rock, BM Solutions and Coventry building society in this niche area.”
Merhdad Yousefi, head of intermediary mortgages at A&L, admitted the lender was looking at the sector, but would not be drawn on any entry dates. He said: “We are currently undergoing a general review of our product areas as we do this time every year.
“While we have no definite date for a product launch, but nothing has been ruled out and it is certainly an area of the market we are considering entering at some stage, particularly as BM Solutions has recently launched into this sector.”
Commenting, Rob Clifford, managing director at Mortgage Force, said: “A&L has a big advantage as it is a massive player in the personal loans market and has plenty of credit risk experience to be a real competitive threat. However, a possible downside is that Northern Rock has been doing it successfully for a while and has established itself in this area.”
Matt Grayson, head of PR at BM Solutions, said increased competition was welcomed in the market. He said: “Any competition in this area of the market is good news for brokers and consumers alike. This sector of the market has been crying out for new entrants for some time.”
