The 2008 remortgage sector is expected to be big business, as many borrowers come off low two and three-year fixed rates.
However, brokers are worried that with increasing numbers of lenders pulling out the non-conforming market and restricting criteria, the number of available products will be extremely limited.
Thomas Reeh, chief executive of blackandwhite.co.uk, stated remortgages were expected to account for £170 billion in 2008 and brokers’ concern was valid.
“It’s amazing how quickly products have gone; lenders are clearly much more fussy. From a customer’s point of view, the lenders that helped them get in the market won’t be there to help them stay there. The non-conforming sector is much bigger than some think, as there is a real grey area between prime and non-conforming.”
Louise Cuming, head of mortgages at moneysupermarket.com, added: “There’s going to be complete polarisation of the market next year. Lenders will be falling over themselves for prime customers and there will be more and more competitive products at the top end. For high risk customers, the choice of products will really constrict and there will be a real borrowing underclass. Brokers undoubtedly face very tough times. It’s the ruthlessly efficient that will survive”
However, Richard Farr, director at the Association of Mortgage Intermediaries, cautioned: “This is a big numbers game. There may be some heavy non-conforming that will be difficult to place, but it will be small numbers. We have the most sophisticated mortgage market in the world and I think the providers will step up to the plate and there will be products available.”
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