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Tranche lending could hamper a recovery

The Association of Mortgage Intermediaries says lenders limiting intermediary distribution through tranche management could suffer in the upturn.

At the Abbey key accounts conference in Ascot last week, Ami director general Chris Cummings said with lenders limiting distribution now, the intermediary sector will shrink, making it harder for all lenders to scale up distribution in an upturn.

He said: “I worry about managed distribution because when the market picks up in the future, unless there is a scalable and robust intermediary community, there will be a problem for all the lenders in the market.”

Legal & General head of mortgages Ben Thompson says a reduced distribution model could hinder a sharp upturn but he believes such a fast recovery in the market is unlikely.

He says: “The recovery might look dramatic when it comes but it will be from very low level. The shrinking of distribution is a real concern.”

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