The recent mortgage price war has benefited smaller mortgage lenders. According to the Council of Mortgage Lenders (CML), the six largest lenders accounted for more than 72% of total activity in 2014 and have seen their share of the mortgage market increase. In addition, the number of small lenders has grown by 46% over the same period. This has created a more level playing field for smaller lenders and made it easier for them to compete.
The fierce competition in the mortgage market is the result of government and Bank of England intervention and the reduction in cost. The availability of cheaper products and a lower cost of borrowing have led to higher delinquency rates and a rise in demand for mortgages. But this competition could also lead to a worsening of the housing bubble in Hong Kong. The FCA’s expectations that the mortgage market will remain competitive could mean another downturn for consumers.
The FCA is predicting more intense competition in mortgages. The pressure to reduce costs has prompted banks to expand their product ranges. But there are downsides, too. The high cost of lending has made mortgages unaffordable for many people, which has led to increased costs and high down payments for some consumers. Nevertheless, smaller lenders have been able to increase their market share by focusing on home buyers.
Smaller Mortgage Lenders Boost Mortgage Market Share Amid Price War
The price war in the mortgage market could fuel a real estate bubble in Hong Kong. The government is trying to cool the market through cooling measures. But despite the measures, housing sales are rebounding from a 25-year low. In the city, Yip’s firm is the largest mortgage lender. It has a 19.9% share of the mortgage market. HSBC Holdings Plc is second with 18.7 percent.
The FCA expects intense competition in mortgages. The government and the Bank of England’s intervention have boosted competition and increased product availability. In addition, the government has backed small lenders, which is a good sign for borrowers and banks alike. However, the price war in the mortgage market could cause a shortage of credit in the city. The result could be higher prices and lower loan approvals.
The intense competition in the mortgage market is a positive development for home buyers. The competition between banks has made mortgages more affordable. Consequently, home loans have risen by almost 45% over the past year, boosting demand. With the price war, small lenders are focusing on home buyers, rather than on investors. A recent survey by Inside Mortgage Finance shows that purchase mortgages made up almost half of packaged loans sold to investors.
