The firm, which is still waiting to enter the mortgage lending sector, says that the UK needs a “minimum” of £200bn to satisfy a regular, steady mortgage market.
Checkmate commercial director Peter Stimson says the Council of Mortgage Lenders’ current predicted £145bn 2009 mortgage market is not normal, but neither was the £365bn 2007 market.
He says: “To try and arrive at an answer we have defined ‘functioning’ as a market in which anyone who has reasonable credit, sufficient income and a deposit of at least 5 per cent to put down, can obtain a mortgage at a ‘reasonable’ rate.”
The lender estimates a minimum market would not include half of 2007’s £44bn buy-to-let market, half the 2007 £40bn self-cert market, £56.9bn of remortgages and 70 per cent of adverse or impaired mortgages. It then took these assumptions from 2007’s peak, and accounted for a 20 per cent house price drop.
Stimson says: “This means that an effective market size that satisfies most current demand would be a minimum of £200bn.”
Stimson says the 2009 market will run a lending deficit of around £55bn, which will increase to more than £80bn in the next 12 months.
He says: “If we have a required funding shortfall currently of at least £55bn, rising in all likelihood to £80bn or more in the next 12 months, the question remains unanswered as to not only who is going to lend this additional sum, but how is it going to be processed?”