We have seen the news and press continually dominated by the recent credit crunch and the effect it will have on UK financial markets. The financial services industry in the UK seems to be suffering due to the looming uncertainty of what the future holds. Market speculation has continued to raise questions over mortgage and secured loan packagers with some suggestions that up to 50% of packagers could be forced out of business in the next six months as a result of the credit crisis and its impact on packager’s business models. A number of secured loan and mortgage lenders, packagers and brokers have already confirmed that they will be forced to cull their workforce, with Vertex and Solvent among others, admitting to a number of redundancies, while Nationwide confirmed a downturn in mortgage levels in its half year results. Mortgage Next packaging said it was cutting eleven jobs and that cofounder and marketing director Justine Tomlinson would be leaving the business. They confirmed that the ‘sudden downturn in the non-conforming lending market has left Mortgages Next with considerable over capacity in our mortgage packaging department. Solent mortgages services has said it will be going into redundancy consultation with 19 staff at its offices in the north west and the Midlands, while ATOM (All types of mortgages) said it would be entering consultation with an unconfirmed number of staff. Sadly, indications seem to suggest that the uncertainty in the mortgage and secured loans markets is set to continue into the New Year, with heavy adverse market in particular having to completely reconfigure if they are to have a substantial long term future. With a large amount of mortgage and secured loan borrowers on non-conforming, adverse credit rates also coming to the end of the initial fixed interest rate period, borrowers should expect ‘payment shock’ which has already led to The Council Of Mortgage Lenders to readjust its projections for repossessions in 2008, indicating an upwards movement of borrowers facing financial difficulties. What is clear is that the mortgage and secured loan market will have to completely restructure in the future. The demand for Mortgages, secured loans and property is still there, but with securitizing lenders in particularly feeling the squeeze, investment organizations will not look at mortgage books with the same enthusiasm that has dominated this market over the last eighteen months. Innovation may slow and lenders may be less keen on expanding into new areas. There is little doubt that the credit crunch will lead to a more prudent approach across the financial sector. On a more positive note, mortgages and secured loans are still very much in demand and home ownership still remains a priority for much of the UK population. What is very apparent though is that mortgage and secured loan brokers are going to find it harder and harder to place the business with there being less and less choice of lenders that are in the market to deliver to this need.

If you are looking for a secured loan and want to speak to an expert in this market who can look and discuss with you all the lenders and products available to you simply visit www.easyukloans.co.uk

December 2007