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GMAC-RFC chief Knight warns of 20% slowdown

GMAC-RFC executive chairman Stephen Knight is predicting a 10 to 20 per cent slowdown in gross mortgage lending in 2005 with an increasing number of lenders competing in a slowing market.

In an interview with Money Marketing, Knight says some lenders will struggle which could lead to consolidation.

But despite the slowdown, Knight believes GMAC will increase its market share by 10 per cent and will climb the CML’s lending league table from 12th to 10th place.

Knight’s prediction on lending is more downbeat than others, with the Council of Mortgage Lenders estimating that gross lending will fall by around 8 per cent this year. It estimates that total gross lending will be around 271bn this year, down from 293bn in 2004.

Durlacher analyst and director of research David Pannell says he gets the impression that some mainstream lenders are missing their targets so far this year. He also expects net lending to grow but at not the rate people are expecting.

Pannell says: “Sub-prime lending is going to be strong this year but it is a small percentage of the whole market.I think the estimation that gross lending will be down by around 15 to 20 per cent is a realistic figure.”

Knight says: “More lenders are seeking business. So everyone’s marketing has got to get better. The only marketing philosophy to have is to promote heavily what you do best.”Knight interview, p15

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