Vic Jannels, chairman of AToM, said there was currently ‘a distinct lack of competition’ in the market with high rates acting as a deterrent to borrowers.
He believed giving borrowers more options would increase consumer and investor confidence and lead to increased investment returning to the market.
Jannels commented: “If there is a rise in confidence, we may see the number of securitised portfolios being purchased by investors increasing. This will ease the pressure on securitised lenders, and generate more competitive rates.
“Unless, of course, the balance sheet lenders are holding out for something more sinister. The total demise of the securitised lending sector, surely not?”
Matthew Wyles, group executive director of Nationwide, said: “Every balance sheet lender in the UK has been affected by the credit crunch, so there is simply less cash circulating in the market. It’s not a case of not wanting to lend; it’s not a conspiracy, it’s a pressure we’re all having to deal with. The supply demand dynamic has inverted so we have finite supply and infinite demand and lenders are going to make sure they achieve the right balance of risk and return. The current market allows us to widen margins and limit risk and it would be irresponsible to our shareholders not to do so.”
