While some have stated that the market is ‘in intensive care’ and would remain so over the coming weeks, those at the recent Mortgage Introducer Sub-Prime & Technology Forum in Cardiff believed the market was just undergoing a ‘blip’, which would, in fact, help to correct the market.
With the non-conforming market undergoing rapid changes over the past 12 months as lenders realised the opportunities within the sector, this ‘blip’ serves as a timely reminder that nothing is certain in the mortgage market. The recent collapse of Victoria Mortgages reiterated this point.
While rumours suggest that the lender could be saved by an outside backer, this development has undoubtedly led to lenders, particularly the smaller organisations, again reviewing their strategies, repricing their products, changing criteria, or moving away from the non-conforming market altogether. While this continues, brokers will have to be extra vigilant and look at product updates on a more regular basis than would have been the case just two months ago.
While the credit crunch continues lenders will remain on high alert, but recent research by GE Money Home Lending has suggested that advisers are also feeling the pinch, with a quarter admitting that the recent market uncertainty had adversely impacted on their business.
While consumers have undoubtedly become more financially savvy over recent years, there is still a concern that consumers could be affected by the headlines that have dominated the tabloid press, predicting the end of mortgage lending as we know it. It is up to the industry to show that the market is strong and continue to innovate and provide solutions for borrowers, whatever their financial standing.
While undoubtedly the non-conforming crisis will lead to market changes, it must be remembered that the sector still has a vital role to play.
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