Overseas banks cautious of UK entry

At the recent British Mortgage Senate, Ben Thompson, director of mortgages at L&G, revealed that the firm has talked to lenders from countries including Australia and Japan in an effort to bring these banks to the UK mortgage market.

The firm said that only six of the 66 overseas lenders which it has contacted have launched with its club. Although 49 of the banks responded negatively to L&G’s enquiries, there are a further nine prospects still pending.

Thompson said: “We are being told for the most part that these companies recognise the potential opportunities in the UK market but that the timing is not right yet. We have to be mindful that there are a variety of reasons for this, not least the significant amount of rebuilding that needs to be done on an international scale.”

Thompson added that although overseas lenders would not transform the market overnight, they may contribute towards sparking UK lenders into life.

Paul Welch, managing director of Large Mortgage Loans, expressed surprise that the amount of positive responses were low.

He added: “I believe there are more banks with the appetite to lend in the UK. Some banks which they may have contacted could have had bespoke deals with other lenders or could have had different plans for moving into the UK.”