Secured loans market offers greatest potential

With both Kensington and Infinity now in the frame, the secured loans market appears to be booming and is likely to continue growing.

Martin Gilsenan, director at Residential 1 said the industry only needs to look at how the secured loans market has expanded over the last six or seven years to realise there is a lot more room for other lenders.

However, in an increasingly populated mortgage market an emphasis on being innovative is a common theme of success. Gilsenan said: “lenders will have to take a specific attack in-order to penetrate the market. For example Kensington products are have lower redemption charges.”

Alex Hammond, press manager at Kensington, said: “As with the first charge mortgage market lenders can bring something to the table. Product innovation or service can make a difference but lenders that come to the table with a ‘me too’ approach are unlikely to succeed. Kensington entered the second charge loan market bringing an innovative and pioneering business model to the sector. For example same day payout for no extra charge and one plus one early repayment charges (ERC). When regulation comes in 2008 lenders will have to be more transparent about ERC, whereas Kensington are leading the way.”

Mike Fitzgerald, sales director at Brentchase Financial Services, adds: “Secured loans will continue to grow for several reasons. Firstly, they give people the option to borrow without upsetting there existing mortgage rate. Secondly, if someone is extending there property they can take on a secured loan for a shorter amount of time, which makes it a much more viable option. I have seen a big change in that people want to get out of dept as quickly as possible. Before there used to be no synergy between mortgages and secured loans but now more brokers are considering them in the right circumstances.”