Intermediary lender Precise Mortgages, currently lending on buy-to-let, got the green light to lend to residential borrowers from the Financial Services Authority on Tuesday. It is the first non-bank lender funded through the wholesale markets to achieve these permissions since the credit crunch hit in 2007.
Robert Sinclair, director of the Association of Mortgage Intermediaries, said: “This is precisely what the market needs. It must have been a long and exhausting process and I’m really glad they’ve got there.
“AMI hopes this expanding of permissions might allow Precise to expand its capital base and capitalise on the opportunity to get competition into the market place. Investors looking for enhanced but protected positions in the market might view this as an opportunity.”
Precise Mortgages managing director, Alan Cleary, told Mortgage Introducer earlier this week that the lender intends to help good quality borrowers turned down by mainstream lenders get the finance they want and need.
Tony Ward, chief executive of dormant lender, Home Funding, said: “I think it's good news and very sensible of them to be pursuing the niches which are not well covered by the big lenders. I wish them lots of luck.”
Nigel Stockton, financial services development director at Countrywide, who formerly worked with Cleary at HBOS, said it was great news.
“Every time a new lender enters the market it’s good news. Will it change volumes? Not really, but every little helps and we need more competition. If Precise can extend finance to customers who wouldn’t get mortgage through the mainstream lenders as well then that’s a good thing,” he said.
Precise Mortgages has said it will be fully committed to the intermediary market and there will be no dual pricing.
Brian Murphy, head of lending at national broker Mortgage Advice Bureau, said: “It’s really good news for the broker community that Precise only distribute through the intermediary channel.
“They have excellent systems, a really experienced management team fully conversant with what brokers want and will bring new funding and greater choice to both brokers and their customers.
“That they have mentioned entering into other sectors of the market also makes this overall terrific news.”
David Sheppard, managing director at London-based broker, Perception Finance, added: “Naturally any new lender in either the residential or buy-to-let market will be welcomed by intermediaries and other lenders alike.
“We are still lacking competition and finance in this sector so Precise will add value. The key for them is what market they wish to reach out to. There are certain sectors that are well catered for and opportunities in others and if they can find two or three market segments that are yet to have the attention needed, they could do extremely well both in terms of being popular but also on the margins.”
Rob Killeen, director at City-based broker Capital Fortune, was another broker that added his good wishes.
“We are delighted that Alan and Precise have obtained approval from the FSA,” he said. “They will increase much needed competition and bring their track record of treating customers fairly and innovation back into the industry. We’re very pleased for them.”
David Hollingworth, communications director at Bath-based DA, London & Country, said he thought Precise Mortgages’ entry to the market would have a “pretty limited” impact on lending volumes.
But he added: “It’s always very welcome to see someone new come to market. If you look at the way Precise entered the buy-to-let market it wasn’t with a big splash. I think it’ll be slowly but surely with the residential too.
“Having said that, it’s really good to see a non-bank lender get funding to bring new money to the market and intermediary sector. That’s all really positive.”
John Heron, managing director of recently revived buy-to-let lender Paragon, said: "The market has been desperately short of competition and innovation, nowhere more so than in specialist sectors. The non-banks have led on product innovation since the mid-1980s and it is vital this sector flourishes again if we are to have a diverse and competitive mortgage market. It is good to see new enterprises like Precise make some headway, and securing FSA authorisation is a really significant milestone for them."
And Sally Laker, managing director of Mortgage Intelligence, added: "I think it's great news that Precise can start lending in the residential market and bring much needed additional funding to intermediaries.
"They have successfully launched in the buy-to-let sector, and we will look forward to the next range of products coming soon."
