The merger, due to complete in September, will bring together the two largest companies in the affordable housing sector and create TMP Sherwins.
The firm said the deal targets a critical part of the UK’s housing planning framework, and the formation of TMP Sherwins provides a focus of expertise in the sector and among challenge lenders to bring a better choice of products to the market alongside a raft of client benefits.
With offices based in Central London, Kettering and Kent, plans to roll out the business nationally over the next 24 months are already underway.
Managing director of That Mortgage Place, Kelly McCabe said: “The fresh-faced TMP Sherwins will bring with it the years of experience and knowledge from the two firms, as well as a host of other fantastic benefits to further strengthen their position as market leaders in the affordable housing sector.”
Andy Frankish, new homes director at Mortgage Advice Bureau, (pictured) added: “I cannot stress enough how important the affordable housing sector is to the UK housing market. With the critical need for new housing, this sector of our industry has to increase its output. With house prices continuing to rise, affordable housing solutions are becoming increasingly more popular with first-time buyers, and with the support of the local Government, we expect them to be used more often.
Frankish added that the volume of business done in the affordable housing sector are much bigger than those done on Help to Buy with a bias to the south east.
“The Help to Buy: equity loan is vastly under supported by lenders and there is a dire need for more in the shared home ownership market.”
When asked why some lenders are still lukewarm on shared home ownership, , he said many had fairly outdated views of the market.
“When you look at the risk of this kind of lending, buyers typically have a 25 to 75% share of the property, so plenty of skin in the game. Equally, many borrowers have more than a 5% deposit and we have seen the profile of these borrowers change to professionals with average earnings of £50,000.”
He added that the re-sale market is getting better although it still has some way to go, but the rules around section 106 [repossession] have also evolved so lenders can re-sell after six to 12 weeks at full market value.
The merger of the businesses will see no redundancies or changes in personnel although the firm has a recruitment drive planned.