You are here: Home - News -

Datamonitor warns of rogue traders in right-to-buy sector, but reports good growth rates

  • 21/05/2003
  • 0
Despite media reports of exploitative right-to-buy service companies, market analyst, Datamonitor, h...

Despite media reports of exploitative right-to-buy service companies, market analyst, Datamonitor, has reported opportunities for lenders in the sector. In its report Right to Buy Mortgages 2003, Datamonitor highlights the threat of companies exploiting the right-to-buy system and over charging. However, it also points to an expected compound annual growth rate of 5.7% over the period 2002-2007, making the market an attractive prospect despite ‘rogue’ traders.

The report said: ‘Given that right-to-buy service companies may ‘unlock’ a number of right-to-buy mortgage deals, lenders should ensure they are present on the panels used by reputable right-to-buy service companies. This is particularly the case for non-standard lenders as service companies will appeal most to those borrowers who believe they will experience greatest difficulty in finding a mortgage.’

The Office of the Deputy Prime Minister (ODPM), which prescribes the right-to-buy rules, pointed out that incentive companies, not service companies, are most guilty of exploiting the right-to-buy scheme, offering tenants a lump sum cash payment in order to gain ownership of a property. However, it still had misgivings. A spokesman for the ODPM, said: ‘The issue is that people can go to their Local Authority and have everything done for nothing, while some service firms have been charging quite large amounts of money. But, to be fair, we are talking about a minority of service companies that are a problem.’

Guy Batchelor, sales and marketing director at Platform, agreed with the reports findings. He said: ‘The companies we deal with are well run and Mortgage Code Compliance Board registered, and we also make sure that there is no excessive fee charging. However, there is a lot of hand holding involved in this type of business which justifies slightly higher fees.’


There are 0 Comment(s)

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.


Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.


Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.


Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.

Read previous post:
Advisers see increase in take-

Foreign climes are proving increasingly tempting for UK property buyers, and creating a growing...