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Fears over Mortgage Express margins

Difficult times could lie ahead for Bradford & Bingley&#39s specialist lender Mortgage Exp-ress as pressure builds on margins, says Merrill Lynch.

Analyst Christina Marzea says she is concerned with MX&#39s balance growth, saying that as the book matures, the higher redemption profile of this type of lending – buy to let, self-certification and equity release – will become evident, with negative implications for book growth and margins.

Marzea says MX redemptions in the first half of the year have “ticked up significantly” and asset duration continues to decline while pointing out that just to keep revenues flat, for every £1bn of traditional mortgages redeemed, B&B needs to do around £1.5bn of specialist lending through Mortgage Express.

Earlier this year, Durlacher analyst David Pannell warned of a buy-to-let bubble, saying the sector is more dangerous than its small share of the overall market would indicate.

Marzea says: “There are limits to how fast this book can continue to grow and it is as yet unclear to us that it can deliver improved returns. If anything, we see further margin pressures ahead, both on the funding side and on the lending side, where specialist lending redemptions remain a risk.”

But MX head of business development Tim Sturley says: “We widened our product margins in the first half of 2004 and the asset quality of our lending remains excellent. Balance growth has continued to be strong. Both our arrears levels and our redemption rates are performing better than the market as a whole and we see no reason for these trends to change.”


Lighthouse in bid to rescue Lifeboat

Lighthouse Group is believed to be in advanced negotiations with the administrators of Lifeboat to acquire the stricken IFA and mortgage broker. Sesame and Destini have both been in talks with Lifeboat about buying all or parts of the business but negotiations have not progressed. Tenet Group pulled out of talks a week ago after […]

Webline is first Ifap technology sponsor

Intermediary portal Webline is joining product providers to become IFA Promotion&#39s first technology sponsor. IFAP says the move is further evidence of growing industry confidence in a strong IFA sector post-depolarisation, following the recent additions of London Mortgage Company, GMAC and Mortgage Express to IFAP&#39s list of sponsors. Webline managing director Paul Holland says: “We […]

Doorbells hit a sour note for buyers

The National Anthem, Jingle Bells and Nirvana&#39s Smells Like Teen Spirit ringing out bell-fashion from elegant front doors may be mildly amusing but could cost you the sale of your home, according to a report by Cheltenham & Gloucester. The Diary agrees with 92 per cent of the country that novelty bell tunes are rather […]

FSA moves nearer to reattribution of orphan assets

The FSA has moved a step further to creating a structure for reattributing billions of pounds of orphan assets with its proposals for the fair treatment of with-profits policyholders. Last week, the FSA issued revised proposals on with-profits, which will also require providers to issue consumer-friendly principles and practices of financial management. The new proposals […]

Looking back at 2015

By Fiona Tait, Pensions Specialist 2015 was quite a year for pensions. Change, more change, and proposed changes to the changes. The Spring Budget – pre-election plans With everything that has happened since, it is hard to remember what happened in March. Following on from the bombshell of the 2014 Budget, the Chancellor confined himself […]


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