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‘Securitisations will be big test for UK lenders’

Portman group development director Matthew Wyles claims the difficult trading conditions facing lenders will see a “major paradigm shift” in the UK mortgage market.

Wyles believes the large number of mortgage securitisation deals scheduled for September mean that lenders will soon find out whether their models are viable following the severe turbulence experienced in global credit markets.

He says: “The markets will eventually recover their composure and liquidity is bound to return but pricing will not go back to where it was. When this crisis comes to pass, we are looking at a major paradigm shift. It is probably the most interesting thing I have seen in the market in the last 10 years.”

Mortgage brokers say they are not surprised by the number of UK non-conforming lenders temporarily withdrawing their sub-prime mortgage ranges from the market.

Premier Mortgage Service managing director John Malone says: “I think we are going to see a lot of lenders retracting from the market now and lying low for the next few months.

“None of it surprises me as I have expected it to happen for some time now.”

Robert Sterling managing director Kevin Duffy says: “The organisations lending money in the US also have a stakehold in the UK market so it is clearly going to have an impact. The question is also whether we are going to make it through the next few months without one of the big players withdrawing.”

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