Mergers & Mortgage Lenders

[Ronny]

Will mergers of various of the UK’s banks and building societies have a detrimental affect on the mortgage market?

Within the past number of months there have been numerous takeovers and mergers mooted between some of our high street banks and building societies.

Within this timescale we have also seen lenders exit the market, and some of them major players in the mortgage industry e.g. The Mortgage Business – one of the lending arms of HBOS.

The above has the obvious effect of reducing the number of mortgage providers and mortgage products available. Each lender adopts their own underwriting criteria to cases ensuring that alternatives are available for customers.

My fear would be that fewer and fewer lenders are around, which will in turn have the effect of a monopoly held by a small number of banks and building societies over the UK mortgage market.

Competition is healthy and necessary to ensure that applicants are able to secure the best terms possible. One would hope that the ‘thinning’ out of lending societies does not rob the mortgage industry of this essential component.