The Competition and Markets Authority (CMA) estimated that the two firms, which are parents of Kent Reliance, Interbay, and Precise Mortgages respectively, could account for as much as 50 to 60 per cent of the limited company market.
Although the regulator accepted that the methodology used could overstate this position, it added that the lenders could not identify any specific competitors large enough to significantly alter this.
In its final report into the merger, which was approved last month, it revealed that OSB and Charter Court provided evidence showing the sizable impact of TMW entering the limited company market last year.
This evidence showed TMW now had the largest share of broker recommendations, ahead of the merging pair.
The CMA noted that TMW’s “strong position in other BTL customer segments and BTL lending overall, and its ability to access cheaper funding as part of Nationwide Building Society” would enable it to offer lower prices for some customers
“The CMA considers that TMW is likely to provide a stronger constraint on the parties post-merger than its current estimated share of supply indicates, particularly because it started supplying limited landlord customers partway through 2018 and so the share of supply does not include twelve months of lending,” it said.
The CMA added that, although the lenders were two of the four main competitors in supplying BTL limited company mortgages and had a high estimated share of supply, it believed “the presence of alternative suppliers and particularly the growth of competitive options through recent entry and expansion in this segment will constrain the parties post-merger”.
Last year, TMW managing director Paul Wootton told Specialist Lending Solutions the lender had seen “strong demand” at the “upper end of expectations” since it re-entered the limited company buy-to-let sector.