Checkmate has announced it has sufficient funding to launch as a new lender next year and has been hailed as a huge endorsement of Stephen Knight and his team. But not only that – it has been viewed as a positive sign for the mortgage industry.
Commenting on the welcome news, John Charcol’s Ray Boulger said: “It is not only a ringing endorsement of Stephen’s expertise, it is also a vote of confidence in the future of the UK property and mortgage market.
"The principle new backing is from the Rothschilds - RIT Capital Partners Plc and Lord Rothschild's family interests. The Rothschilds built their fortune by getting their timing right, as well as choosing the right investments. The timing of purchases was dictated by taking a view that the market had bottomed out rather than trying to pick the bottom."
Boulger believes this summer was the turning point: "I have been saying for the last month that we will look back on June/July this year and say that it was when mortgage rates peaked in this cycle. I am now even firmer of this view and the timing of this investment suggests that the Rothschild management also believe this. With Checkmate having raised much of its launch capital from the private equity sector and Blackstone looking at Paragon, private equity is calling an improvement in the market by early next year.
"With Bank Rate likely to be falling again by early next year and additional mortgage funding coming into the market from private equity investment there are good grounds, contrary to the view of many economists, for thinking that house prices will bottom out in the first half of next year."
Confirmation of the exact launch date for Checkmate will be announced next year. Commenting, Stephen Knight, executive chairman of Checkmate Mortgages, said: “It is testament to the reputation of our team, and to the foresight of our investors, that we have been able to raise capital for a new lender in such bad, and still-deteriorating, market conditions.
“Of course, if you think about it, the time to be recruiting and building a computer system is when others are shedding staff and reducing their IT investment. And the time to be launching into new lending is when the liquidity freeze starts to thaw, about 18-20 months since it started in August 2007. We believe that we have the timing right.”
The Board of Checkmate Mortgages will comprise Stephen Knight (Executive Chairman); Barry Searle (Managing Director, Operations); Roger Brown (Managing Director, Distribution), a Finance Director to be recruited plus nonexecutive directors proposed by the investor consortium. Further appointment announcements will be made in due course.
