Last year, while many industry commentators suggested we would break the £200bn barrier, the CML were more conservative at £195bn. However, as the year has progressed and lending levels have grown and stayed strong, the evidence led to the CML revising its prediction upwards of£200bn at the end of July.
It has done the same for next year, now predicting gross lending will hit £220bn, rather than the £206bn figure it suggested at the end of last year.
Now, we all know wanting to lend in the UK and actively doing so are two very different things – think back over the past few years and genuine new lenders coming to market have been few and far between.
The hullabaloo recently over the launch of the Family Building Society suggests the market has been starved of new entrants to talk about for some time. While of course we welcome new lenders this society is an offshoot of the National Counties and one might suggest it technically can’t be considered a wholly new operator because of this.
While we have been regularly told about the new banks waiting to make an impact, the proof of the pudding will be in how many of those eventually launch, offer mortgages and want to distribute through intermediaries. In that sense, once again it is a wait and see process for the mortgage market.
What can’t be denied is the fact the industry loves a rumour about a new lender launching as much as anything. I certainly believe we are likely to see a fair number of new lenders coming to market over the next couple of years but I suspect this will not be a flood.
Those anticipating a new entrant is going to come in all guns blazing, pricing to within an inch of their lives at the highest end of the risk curve, are likely to be sorely disappointed.
I would anticipate (at least in their early incarnations) to see lenders being very cautious, limiting their distribution and running soft launch operations for a number of months. Anything else would be, at the best, foolish and, at its worst, reckless.
Richard Adams is managing director of Stonebridge Group
