Sub-prime lender Mortgages plc has announced widespread changes to its product range, pricing structure and intermediary services in a bid to fight off growing competition in the non-conforming market, writes Kirstie Redford.
The changes, which take effect from 17 September, include a revised product range that claims to knock 0.25% off current competitor rates. Although the lender is slicing margins in order to net a larger share of the sub-prime market, procuration fees will remain at 1% and the maximum earning cap for advisers will be doubled from £2,500 to £5,000. Criteria for borrowers also remains unchanged.
Trevor Pothecary, managing director of Mortgages plc, said: ‘We want to significantly increase our market share. We have established credibility of brand and now want to be first for products and service.’
Service enhancements being introduced by the lender include an in-house ‘Rapid Remortgage’ that guarantees completion within five days by eliminating the need for a solicitor.
The new product range includes flexible, buy-to-let and right-to-buy deals for full status or self-certification borrowers, the highest LTV standing at 85%. Rates start at 6.49% with a 30% deposit. Products with two-year fixed rates and no overhanging redemption penalties are also to be introduced.
Pothecary said the changes are aimed at creating new standards among lenders. ‘We are setting challenges for other lenders to follow,’ he added.
Brad Fitton, director of specialist IFA Red Mortgage Solutions, said introducing lower deposits to the sub-prime market would be of more benefit to customers.
‘Headline rates are great, but the majority of our clients cannot put down large deposits. Lenders need to concentrate on getting LTVs above 85% together with low rates if they really want to shake up the market,’ he said.