According to a source, small non-conforming mortgage lenders are believed to have been scouted by major lenders in the mortgage industry. Added competition from lenders, together with funding issues, has led to some specialist lenders apparently struggling to survive.
It has also been claimed that the recent takeover of Kensington Mortgages by Investec ensured the survival of the lender, as market pressures would have forced it under had the takeover not gone through.
Ian Giles, director of marketing at Kensington, said: “As we said at the time, Kensington is a viable company but was not achieving as much as we’d like, due to constraints and working capital in the business. What happened over the past few weeks changed the views on our prospects and with Investec on board we have the capital investment to develop the business faster.
“There is an issue about rate growth – we were doing good business, but now we can do more. My question is why would a company buy another when they are really after the mortgage books? Why would a management team buy another management team?”
Andy Pratt, chief operating officer at Alexander Hall, said: “Many lenders are struggling for funding and firms are looking for secure funding which will lead to mergers and acquisitions. This always happens in this situation.”
