Bank of China, Sweden’s Handelsbanken and Israel’s Bank of Leumi are the latest foreign-owned lenders to launch in the UK market boosting the number of firms open for business.
However realpricecomparison.com figures show a dramatic drop in lenders operating in the UK since July 2008 with just 71 firms offering variable mortgages now compared with 96 a year ago.
Familiar names which have closed to new variable business or disappeared entirely include Bank of Scotland, Egg, Giraffe, GMAC, Heritable and Darlington Building Society.
The situation for providers offering fixed mortgages is not as bad with 73 firms open to new business now compared with 76 a year ago when many lenders had stopped accepting customers.
Many of them are now open again for fixed business including building societies such as Furness, Leek United, Saffron and Newbury plus broker-focused group ITL Mortgages. Those that have stopped offering fixed mortgages include Bristol & West, Bradford & Bingley, Giraffe and Bank of Ireland in mainland UK.
Bank of China has launched tracker loans for personal borrowers and buy-to-let customers with the rate for personal borrowers currently at 3% and 4% for buy-to-let. Borrowers though need a 25% deposit and have to pass a personal interview at one of Bank of China’s branches in Glasgow, London, Manchester or Birmingham
Francis Ghiloni, Commercial Director at realpricecomparison.com said: “It is encouraging that foreign banks believe there are opportunities in the UK market as the past year has seen a dramatic collapse in the number of lenders open for business.
“Bank of China and other foreign lenders cannot on their own revive the UK market but after a year of banks and building societies shutting down or being taken over it is a good sign that there are new entrants.
“Increased competition and increased availability of mortgages is the key to the revival of the mortgage market. Nobody would want a return to the lax lending of the past but there is demand at sensible prices for lenders who want to lend.”
Other foreign lenders now competing in the UK market include Swedish-owned Handelsbanken, which has around 50 branches, and focuses on professionals and high net worth individuals.
Israeli-owned Bank Leumi (UK) concentrates on high net worth individuals and professionals with a minimum advance of £500,000 and LTV of 70%. Its tracker rate is linked to LIBOR and is currently 2.56%.
