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Lending moving into different suppliers

It was with interest that Enables IFA’s noted that at the beginning of this month more competition appeared in the mortgage market as two Indian lenders opened for business in the UK.  One is the State Bank of India, who have begun lending again on buy-to-let mortgages after pulling out of new lending in September 2012. The other is Axis Bank, one of India’s largest banks, which is also considering a launch in the buy-to-let market.

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It will be interesting to see how their services develop . John Charcol senior technical manager Ray Boulger says: “One would hope and expect that State Bank of India has learned from its previous mistakes. To make a mistake once is forgivable for lenders that are new to the market; to make it twice is not. ”He says: “Obviously, the best way to step into a new marketplace is to dip your toe in. Lenders need to understand not just the industry they are working in but the market as well. That means speaking with existing players in that locality, exploring distribution channels and getting the lay of the land.”

“State Bank of India previously wanted to be the best on rates in its particular market and we saw what happened: it got inundated with applications and had to shut down its operation. That is an example of the wrong approach.”  It would seem that the right approach would be to find a gap in the market and target lending where there are not enough options for borrowers.  The Financial Conduct Authority is reviewing three banking licence applications and is in talks with a further 19 prospective lenders.

Your home might be at risk if you do not keep up your mortgage repayments. 

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