While it could be argued some poorly run companies would have blown over in the face of the merest headwind let alone the hurricane that followed the credit crisis, there were just as many hit by misfortune, losing too many customers in too short a period and pummelled by rising business rates earlier this year. Whatever the reason, there was a final straw that simply broke their back.
Sadly, last week saw the demise of another mortgage firm, Savills Lending Solutions (SLS), with the reason behind its closure laid firmly at the feet of the continuing dire state of the specialist sector despite high demand.
As the eight-strong team of SLS now hunt for new jobs along with a few million others in the UK, it merely highlights the challenge facing many consumers and brokers with clients trying to buy a home who are even slightly outside the “super vanilla” credit rating that the lenders currently want.
While some lenders, such as Kensington and Aldermore, have begun to make moves to help those that, as they say, would not pass the automatic underwriting process of the high street lenders, the problem is far greater than they alone can solve.
There is no doubt, the demand is there from customers desperately trying to secure mortgages, be they self-employed, needing a high LTV, a buy-to-let investor unable to access sufficient funds or, crucially, anyone with the slightest hint of adverse credit.
Not since the last recession (a mere 20 years ago) have so many people who have never missed a bill payment or ended up with adverse credit now found themselves in just that situation, often due to circumstances out of their control.
Those already with mortgages can perhaps take comfort in being able to revert to a lender’s radically reduced SVR, but a time will come in the not-too-distant future when the base rate will rise and remortgaging will become a necessity.
The specialist sector will come back, but with the continuing restrictions on funding the questions are when and to what extent?
We all know that the consumers and the industry desperately need some innovation and lenders with sound knowledge of the area to return, so the next question is, who will make that move?
