The firm says it believes that in the short term there will be no institutional investor appetite for portfolios with high LTV adverse credit mortgages.
Kensington says it is refocusing its resources in the short term on its range of prime loans.
Director of marketing Ian Giles says: “With the success we have already had with our range of prime self-cert and buy-to-let mortgages since launching them late last year, it makes sense to refocus our resources on the prime sector until investor appetite for higher adversity mortgage portfolios returns.”
Personal Touch Financial Services sales director Dev Malle says it is going to be a difficult market for Kensington to operate in. He says: “In the 75 per cent LTV arena, you have got some of the big guns playing such as Abbey and HBOS. It is a big call for them but I think it is just for the interim.”
Both GMAC and Edeus say they have no plans to follow Kensington’s lead. This comes despite GMAC-RFC alerting packagers a few weeks ago that it was considering reducing LTVs to 75 per cent, a move it later decided against.