Precise rejected ex-pat launch but new entrant ‘under development’ – CMA

It has also been revealed that another unnamed lender’s offering is “currently under development”.

Precise’s potential entry was revealed in the Competition and Market Authority’s (CMA) final report into the merger of parent company Charter Court with One Savings Bank (OSB).

Of the two merging lenders only OSB is operating in the ex-pat BTL sector, but the CMA revealed that “Charter Court has in the recent past considered entry into this area on a number of occasions”.

“During its investigation, the CMA saw some evidence to indicate that, without the merger, Charter Court might have entered the ex-pat landlord customers segment,” the regulator said.

However, Precise Mortgages managing director Alan Cleary (pictured), told Specialist Lending Solutions: “We considered it but have no plans to enter ex-pat BTL.”

Ex-pat a ‘market opportunity’

As part of its merger enquiry, the CMA asked competitors whether they had plans to start lending to expat landlords.

One added that it did, noting the proposition for expat landlord customers was “currently under development” and that it was a “market opportunity”.

“One or two competitors commented that they saw expat customers as more risky than other segments, and that it may be outside their current risk appetite or would involve increased due diligence costs,” the CMA said.

And it added that competitors said it would take a few months to investigate and assess the risks of the customer segment, and then a few months to implement the decision.

On balance, the CMA said it considered there were sufficient lenders active in the market, and that competitors, particularly those already active in specialist BTL lending and with higher risk appetites, had the ability to enter or expand their offering in a given segment relatively quickly and easily.

It added that any entry by Charter Court would not lead to greater competition than was already present in this segment.

Merger cleared

The merger was cleared last month by the CMA, and the lenders said that, regulatory approval allowing, they expect it to be completed by the end of September.

Brokers responding to the CMA enquiry raised no concerns about the move, while the regulator anticipates The Mortgage Works will provide the main competition in the limited company landlord market.