Speaking at the Mortgage Business Expo in Manchester, Peter Izard, senior manager – corporate accounts for GMAC-RFC, said: “We must clarify and clean up the perception of the market. Non-conforming lending has a significant part to play and the market wouldn’t be as buoyant without it.”
Research by GMAC-RFC revealed the perception that non-conforming clients come from the lowest social status classes is inaccurate, with 60 per cent of clients coming from the highest social classes. 9 per cent of non-conforming clients earn more than £43,000 per year.
Izard also countered the belief that most clients become non-conforming borrowers through not being able to manage their finances. He revealed most often it is life-changing events like divorce that pull people into debt. Non-conforming clients are three times more likely to be divorced and just 8 per cent said they were always in debt and struggled to make ends meet.
Estimations put the non-conforming market share at 14 per cent and growing. “We’re seeing a plethora of new entrants into the market, even the traditionally cautious building societies,” said Izard. “Competition will raise the barrier we have to meet. The market can sustain the new entrants, but there will be casualties. Those that meet the market head-on will survive.”
