Speaking at the Mortgage Next conference, Simon Cossons, regional sales manager – South at Mortgages plc, said the lack of confidence in the non-conforming securitisation market was set to continue for the foreseeable future, affecting a number of lenders.
Cossons admitted Mortgages plc’s levels of monthly lending had dropped from nearly £300 million to £50 million as it avoided taking on business which it was unable to securitise.
However, the use of Merrill Lynch’s balance sheet would maintain its position in the market until the capital markets returned.
The admission came in the same week as the lender announced it was to cut its workforce by 20 per cent.
Peter Beaumont, deputy chief executive at Mortgages plc, said the redundancies would affect its offices in Glasgow and London, as well as regional staff.
He said: “Mortgages plc, in common with most non-conforming lenders, has reduced its new business activities until such time as confidence is restored and the market resumes normal functioning. Reduced new business volumes mean that operating costs also need to be managed. I would like to stress that Mortgages plc remains committed to the UK market.”
Mark Sismey-Durrant, chief executive of Heritable Bank, said: “The job losses are no great surprise as if the volumes are low, it will have problems. If lenders can get to the end of next year, they will be fine. It’s just what happens in the intervening months that will be telling.”
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