db mortgages admitted it was withdrawing its adverse products from the market until the end of the month to reprice, while Close Mortgages has pulled all its fixed rate mortgages and increased the rental cover on its remaining product range.
Meanwhile, West Brom announced it was holding fire on its latest securitisation because of difficult market conditions.
Bob Sturges, director of communications at Money Partners, said: “The market is entering a challenging period and a lot of concern is being raised by the investor community over anything high-risk. Non-conforming assets will be more expensive in future, while many lenders will struggle to get portfolios away. With West Brom, I’d be concerned if the portfolio it pulled was prime buy-to-let as this would point to a crunch wider than just adverse.”
Thomas Reeh, chief executive of blackandwhite.co.uk, agreed: “This is a sign of things to come. The capital markets are wary of anything to do with non-conforming and there is a definite squeeze at the heavy adverse end. One thing in our favour is that there aren’t many lenders offering 100 per cent loan-to-value adverse, unlike the US. But the capital markets are painting all non-conforming with the same brush.”
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Mark Sismey-Durrant, chief executive of Heritable Bank, believed the db situation was significant. “The sentiment is the biggest thing for db as several German lenders are currently having problems and it won’t want to be seen to be caught up in that. It wouldn’t surprise me if the US effect is being felt across the board in Germany.”
