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No room for mercy on price war battlefield

by: Lea Karasavvas
  • 23/02/2015
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No room for mercy on price war battlefield
As another week draws to an end and the rate wars continue, managing director of Prolific Mortgage Finance Lea Karasavvas takes stock of the victors and victims of the battle.

We have seen many casualties of war. Poor, helpless application fees of £99 being left abandoned on the battlefield as the Virgin Squadron ruthlessly ditch them for the better of the troops. In the battle for market share, there can be no mercy.

Elsewhere, lenders continue to slash their rates. Accord once again drives its pricing down and, with the enemy in sight, has even ramped up the service part of its battalion making it stronger and robust. As a unit it looks set to destroy many that come before it. Its share will inevitably grow. Accord now must deploy troops in London too, with able Captain Lucy Hamer dispatched to orchestrate a takeover of the City of London where presence was previously well camouflaged.

What of the Spanish Army? Santander continues to march on, performing the pincer movement with residential and buy-to-let armies. It surrounds the consumer with choice and efficiency as General Fordham deploys his troops far and wide to capture pockets of the market that were previously unchartered territory.

Colonel Curran will not take this lying down. The armies of the north most notably in Halifax will counter. The efficiency of its troops, the speed of attack and productions of offers have long been its forte. Sometimes, the artillery may have lacked the potency of others, but the effectiveness by which it executes its weapons has long gained the lender territory. However, of late its weaponry has improved too. Colonel Curran has some of the best products in the lower risk brackets which will allow the lender to continue to grow its market share.

However, after deploying troops everywhere, after capturing most markets with immense ease in the first month, the reduction in income multiples undertaken by Woolwich has wounded it. With higher rental stress tests than most and now a reduction in income multiples, this is surely a tactical retreat by a lender that was spreading far and wide. Its gain in the markets and early victory in the war of the rates has meant service standards were damaged and took immense fire. Its latest tactical retreat could be a blessing in disguise as it will undoubtedly fall back, regroup, and come back strong again.

It’s been quite a battle. One that many were not expecting. My tour has many years to run, and all I can think of is being at home with my wife and kids. Until then, I must continue to fight my way through this battle. I think of those that we have lost and remember them fondly. So long five-and-a-half times income, you were strong and you were valiant. You will be missed. Godspeed first-time landlords, whilst we can still find some of you out there, others have been lost and you will be missed.

The war goes on. Rates are dropping everywhere but we my friends, we can be heroes.

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