John Malone, Premier Mortgage Services

Whenever there is the kind of change which is going to occur over the next six to 12 months, there are bound to be movements of this nature. All I can say at this point, not knowing the purchaser at the time of going to print, is that this will surely strengthen Mortgages plc’s position financially and may lead to further developments of its product range, which is good news for the client and the intermediary.

There will be more consolidation in the future – especially with that sector of the market – among some of the smaller societies and non-conforming end of the market.

The factors driving such a move include costs, ensuring that you are going to get adequate distribution, Basel II (where everyone is going to have to look at their balance sheet) and the Miles report. There is a lot in the background over the next two to three years which will force more and more consolidation in certain areas of the market.

Bob Sturgess, igroup and First National

We were aware of a possible sale and it comes as no surprise that this issue has surfaced again. Most of us involved in the specialist sector of the mortgage market have, for some time, anticipated further consolidation among players, whether lenders or intermediaries. The latter are most likely to experience this as a result of impending regulation and the need to maximise economies of scale.

To be a player going forward, lenders need the long-term backing of a substantial parent with knowledge of the consumer financial services sector, or to have carved a niche for itself that engenders respect from independent investors and the money markets.

A sale to achieve its long-term survival is not only inevitable but desirable. Competition is good for everyone in the specialist sector, and so we welcome any news that ensures Mortgages plc’s future.

Colin McCallum, Heritable

My initial reaction to the sale has not been one of surprise and I think it will depend on what the new owners want to do with the company as to whether it will be reinvigorated.

We do not have all the details of the deal and so it is a little difficult to say what the impact will be but I would wonder how much it was sold for, which company has acquired it and how it will operate in the future.

I am not sure whether Nikko Principal Investments was looking for a buyer for Mortgages plc. I do know that it has owned the company for two years and it has guided it through a range of issues to the point where it has got a strong proposition. The lender has been doing very well but I would like to know how much it is being sold for. I think a lender of Mortgages plc’s type is a very attractive investment because it is doing mostly adverse lending and demand is always quite high in that market.

Mark Chilton, Purely Mortgages,

The sub-prime market in the UK is going through a period of rationalisation and, therefore, Nikko’s announced intention to sell Mortgages plc, as a going concern, comes as no surprise. With more mainstream lenders entering this sector and a new model emerging where lender groups want to participate in all sectors of the market, it would come as no surprise if one of the mainstream UK major lenders was the acquirer, thereby looking to replicate the success that HBOS has had with BM Solutions.

Inevitably, the sale of the business as a going concern can only be good news for the intermediary market, leading to the maintenance of choice, rather than it being restricted if the assets of the business were merely being sold. However, with the lighter adverse end of the market being already dominated by two or three institutions, the challenge for a buyer of Mortgages plc is to get sufficient volume in the serious to adverse end of the market, where the regulatory net is tightening hard around existing distribution formats.

Malcolm Davidson, Direct Financial Services

It is not good if brokers find themselves in a position where the choice they offer to the client is restricted, but it is difficult to say at this stage because there are not many details about the purchase.

However, it is a positive move for the market as a whole because it sounds as though Mortgages plc will keep the good range of products that it currently offers. If it has good financial backing that is also a good thing, but it all depends on who is buying it. Its rates tend to be higher than high street lenders, but it is competitive within the sector. It is well regarded by the market and so it will be good for the industry if it can continue in its current form.

Andrew Frankish, Mortgage Talk

One of the most important factors is who actually bought it. It would not surprise me if it was a competitor within the industry and I expect more consolidation in the market in the future.

Within the market, we have to look at some of the bigger lenders who are looking to add another string to their bow. An example of this is Britannia Building Society and its subsidiary Platform. The arrangement is to the benefit of both parties, while maintaining a healthy bottom line.

However, this is a good opportunity for Mortgages plc. It will be able to review its products and offer a better range and more competitive deals. Mortgages plc works in a very specific market and the more competitive it is the better it is for brokers and borrowers.