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Sainsbury’s guarantees existing offers on mortgage lending exit

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  • 25/09/2019
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Sainsbury’s guarantees existing offers on mortgage lending exit
Sainsbury’s Bank has ceased offering new mortgages immediately, it confirmed in a trading statement this morning.

 

The lender confirmed to Mortgage Solutions that all mortgage offers already made subject to valuations and other details being completed would be honoured.

It added that it was otherwise business as usual and as a result, if borrowers who have already booked a deal now want to cancel and use an active lender, they will not receive a refund of any fees paid.

The bank also could not confirm how many members of staff would be affected by the closure, but admitted that there would be job losses among its broker facing teams.

It is likely Sainsbury’s will come under the same pressure as Tesco Bank to sell its closed book of customers to an active lender and not risk creating future mortgage prisoners.

A Sainsbury’s spokeswoman told Mortgage Solutions that at the moment it was “looking at all options” for a future sale.

The lender’s broker website now says: “We are no longer accepting new mortgage applications.

“If you would like to check the status of an existing customer application then please log into the Intermediary portal for the latest status updates.”

 

Strategic review

Sainsbury’s completed £1.1bn in mortgage lending in 2018 and said the decision had come around as a product of a strategic review into its financial services arm.

It noted that since relaunching in 2017 the market has become more competitive and the revision will let the supermarket focus on other products with no more group capital injections required after £35m in 2019/20.

Speculation had been surrounding Sainsbury’s future in the market following Tesco Bank’s exit after it closed to new lending and sold its mortgage book to Lloyds Bank earlier this month.

Last week The Telegraph published reports that the lender had been consulting advisers about how much it could raise from the sale of the £1.4bn book of loans.

At the time David Hollingworth, associate director communications at L&C Mortgages, told Mortgage Solutions that it was hard for lenders to keep up in the competitive market.

He added that Sainsbury’s had been a “really good entry and had some excellent rates” but that competition was “pretty ferocious” and it was easy for lenders to see volume drop off.

 

 

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