Mainstream lenders are acquiring a greater share of the self- certification market, meaning specialist lenders could soon see business levels dip.
The trend was revealed in a survey of over 300 intermediaries, conducted by specialist lender Verso. Respondents said it was clear that mainstream lenders are taking a small but growing share of self-certification business.
A number of mainstream lenders, including Halifax and Northern Rock, offer self-certification mortgages under 70% LTV with no verification needed. According to the survey, as long as a large deposit is at hand, borrowers are flocking to the high street names.
Eddie Smith, director of business development at Verso, said that mainstream lenders using this approach could provide a challenge for specialist players.
‘Brokers are turning to mainstream lenders because they know that if their client has a large deposit, they can push the mortgage through quickly without verification and get mainstream rates. It is obvious that mainstream lenders are dipping their toes in the self-certification market ‘ they have seen how successful it has been for specialist players and now want a slice.
‘Our challenge is to respond to mainstream lenders’ actions. You can take the view that everything under 75% LTV is okay, or you can go down the responsible lending route and continue to do checks,’ he said.
Rod Murdison, proprietor at Murdison & Browning, said mainstream lenders were not being irresponsible by granting loans without verification.
‘High street lenders are trying to get their market share of the self-certification market. If someone has a 30% deposit, it is a much better risk than granting a loan to a first-time buyer for four times their salary and 95% LTV,’ he said.