The Christmas and New Year break already seems a long time ago and yet the secured loan market is carrying on where it left off in 2013. In fact, it seems that the renaissance, which we started to witness at the beginning of last year, has taken on a life of its own with new lenders announcing their interest in joining the party this year against a backdrop of £400 million of lending last year.
In the last quarter of 2013 there were big changes to criteria and rates. Strong competition, something the secured loan sector had not experienced since 2008, was definitely the phrase to describe the state of the industry as we closed 2013. Lenders have been jockeying for position and brokers and their clients have been the beneficiaries.
While products and criteria have dominated the headlines, behind the scenes a major factor in the growth has been the positive change in underwriting, with more lenders prepared to demonstrate a greater degree of flexibility. This has not lead to any lack of robust oversight, but at last we have seen a willingness to work with brokers and their clients to find strong reasons to lend.
2013’s crop of new lenders like Precise Mortgages’ secured loans division and Prestige Finance’s relaunch made plenty of headlines and it will be interesting to see what they and established lenders can bring to the table in 2014.
One of the likely scenarios to come out of the MMR could well be consolidation among master brokers with smaller firms not wishing to become authorised if their business model means having direct contact with their introducers’ clients. Larger operations such as Brightstar are very happy to look at building working relationships with these firms in 2014 to the benefit of all concerned.
Bradley Moore is head of secured lending at Brightstar Financial
