Consolidation ‘not as strong as expected’

It was thought that many small lenders and brokers would be forced out of the market as a result of Financial Services Authority (FSA) regulation 19 months ago. However, a number of firms have claimed smaller lenders have been able to adjust quicker to market conditions, with many large lenders utilising the smaller firms for their distribution channels.

David Copland, sales and marketing director at Pink Home Loans, said larger lenders and organisations had given some of their business to smaller lenders, offsetting the threat of consolidation predicted in 2004. He said: “There was a lot of talk about a significant period of consolidation within the mortgage marketplace. However, what we have seen is larger lenders distributing business to the smaller lenders, which has meant smaller lenders have not been affected as much as previously thought.”

Thomas Reeh, chief executive at, agreed regulation had not forced out the smaller firms, and argued smaller lenders had been quicker to embrace market change following regulation. He said: “Smaller lenders have been able to adapt to change quicker and have been able to capitalise on the market conditions. Our panel consists of a number of small lenders who have, in fact, taken business from the larger lenders. It is not all about rates, and smaller lenders have realised that if they provide a good level of service they will win business.”

Reeh cited High Street Home Loans as an example, admitting it conducted 15 per cent of’s business from a standing start less than two years ago.