By Ben Marquand
The Halifax group is to become the latest high-street lender to enter into the non-conforming market.
Birmingham Midshires Mortgage Services Limited (BM-MSL), a division of the Halifax group, and Halifax Mortgages Limited (HMSL) are to be rationalised and relaunched as part of the Birmingham Midshires business, according to a source at Birmingham Midshires. The Halifax group acquired Birmingham Midshires in April 1999.
The relaunch will take place in two stages and the new company will operate as a sub-brand of Birmingham Midshires. The first phase will take place in the middle of November when the name of the new brand will be announced, and a limited range of new products including buy-to-let and self-certification will become available through intermediaries and directly through branches of Birmingham Midshires.
The second phase of the scheme will be completed in the spring next year when they will launch a further range of products targeting the sub-prime market, although further details have not yet been decided.
A spokesman at Birmingham Midshires said: “We are focusing on transforming into the specialist lending arm of the Halifax, and we believe that within the next three or four years more than 50% of our lending will be in the specialist and niche markets.”
“As part of Britain’s biggest lender the scope for development is pretty huge. They will now be able to refer borrowers with an adverse credit history to us when before they would not have been able to help,” he said.
Tony Yorke, communications manager at i-group welcomed the news. He said: “This is good news for everyone and is a sign that the market has come of age. There is a reputational risk in this market, and if the market was not wholesome the Halifax would not even consider becoming involved.”
As pressures on margins increase more mainstream lenders are turning to the non-conforming market either in their own name or in a subsidiary brand. Bristol & West now has a specialist lending division and has been in the non-conforming market for a year now and Abbey National has stepped up its presence in the market by rebranding its subsidiary HMC under the First National brand, another part of the Abbey National Group.
Michael Bolton, sales and marketing manager at Future Mortgages said: “Mainstream mortgage lending makes no sense commercially and therefore the mainstream lenders are looking to enter profitable areas of lending such as adverse credit and self-certification.
But Ray Boulger, technical director at Charcol, said these markets are now looking less risky than before: “There is now more data on the performance of this market and lenders are realising that these markets are performing better than they expected. This is encouraging more lenders to go down this route.”