Over the last year, it seems that anyone with a bucket of money and a megaphone has decided to set up a non-conforming lender and while competition is beneficial to the marketplace, and should therefore be encouraged, you only have to look to Darwin and natural selection to show that only the strongest will survive.
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Those lenders who have entered the market have had to prove to brokers that their offerings are worth putting in front of their customers, while those established players have had to buck up their ideas and also show that they are worthy of placing business with. This has led to improved deals for customers as lenders compete over criteria and rates.
Therefore, it was only a matter of time before one or two started to show the strains of competition. However, it is surprising that Kensington, one of the largest players in the market and someone who I have placed business with on a number of occasions, is the first to show cracks. I think it was an important point to raise that its FTSE status means it has to be more open than other lenders. But it does beg the question of how many others, which are much smaller and are without the established brand name, are struggling?
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Brokers will have to be careful to pick up any vibes coming out of lenders before guaranteeing their client a mortgage over the next few months so they don’t get caught up in a lender going under.
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