The report identifies the greatest area for growth as higher risk lending products such as those with low downpayments or aimed at highly indebted borrowers as well as loans for non-conforming borrowers.
The study goes on to predict those lenders best placed to take advantage of this will be ‘highly-rated universal banks’ who have the necessary size to manage the risk posed by this kind of lending.
Some commentators have predicted that UK firms, with their experience of strict compliance, are well-placed to take advantage of these markets.
Jeff Knight, head of marketing services at General Motors-owned residential funding company GMAC-RFC, said there were huge opportunities available to lenders with the necessary experience who were looking to expand into Europe.
“We already have a presence in Germany and Holland, though you must remember that each country within the union has different rules,” he said. “Acquiring local knowledge is vital.”
Stephen Atkins, group compliance director at Freedom Finance, which has recently expanded its presence into Europe, said: “Parts of Europe have a debt-averse culture which is having to change because of the surge in property prices.
“The fact the UK has such a disciplined and sophisticated market means firms which are big enough will be very well-placed to make the most of the European market.”
Sacha Polverini, chair of MITA, commented: “The European mortgage industry is at a turning point.
“The past ten years have seen excellent asset growth rates for the majority of lenders which have been driven by rising house prices and falling interest rates, low credit losses and a relatively stable economic environment.
“Winners will be characterised by superior underwriting management, superior risk management and more sophisticated funding techniques.”
