Securitisation lenders face difficult trading conditions in what will be a “major paradigm shift” in the UK mortgage market, says Portman Group Development Director Matthew Wyles.
Wyles believes the large number of securitisation issuances scheduled for September will mean that lenders will know by then whether securitisation models are viable following the severe turbulence experienced in global credit markets.
Wyles says: “The markets will eventually recover their composure and liquidity is bound to return, but pricing will not go back to where it was.”
With nervous investment banks holding the purse strings for securitisation lenders, Wyles believes many buy-to-let and sub-prime lenders who are dependent on securitisation will face very challenging trading conditions in the future.
He says: “We will find out which lenders are simply fashion accessories and which are core to the investment bank business. This will really separate the
wheat from the chaff.
“When this crisis comes to pass we’re looking at a major paradigm shift. It is probably the most interesting thing I have seen in the market in the last ten years.”