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Commercial Finance Introducer Commercial Finance Introducer
Hard times
After twelve difficult months, the results of the
NACFB survey are in. And they don’t make for
cheerful reading. Adam Tyler, chief executive
of the NACFB, looks at the damage wrought by
the recession
L
ast year, when we published our For example, figures published by Business and the tightening of criteria for those that
survey results, the credit crunch Moneyfacts, reveal that the number of buy-to- remain mean that buy-to-let has moved out of
had only had six months to let mortgage products available has fallen from the mainstream for the time being. And the fact
wreak havoc with the 476 in August 2008 to 196 in August 2009. In that members’ business has dropped by nearly
commercial finance market. Or, addition, research by moneysupermarket.com 90 per cent over the last twelve months prove
looking at it another way, of those products that remain, has shown that how difficult it is now to source this kind of
contained within the figures buy-to-let mortgage rates have not fallen by as finance for a deal which is anything other than
were the other six months of relatively benign much as mainstream mortgage rates following completely watertight.
trading conditions. So, because this year was the decreases in the Bank of England Base Rate.
going to be the time that the problems faced Since August last year the average rate for Bridging
by the market were going to be revealed in the mainstream mortgages has reduced by 1.95 per Bridging finance has also fallen dramatically.
figures, the numbers were crunched with a cent, whilst buy-to-let rates have only fallen by There are several possible reasons for this,
due sense of trepidation and, sadly, the 1.13 per cent. The lack of available products although I suspect a combination of them is
pessimists in the market will not be
disappointed. June 2009 Year on year % June 2008
Last year, between June ‘07 and June ’08,
members of the Association wrote nearly
£15.5 billion worth of business. This year, that Commercial Mortgages 2,782,719,636 -51.48 5,735,712,988
had dropped by a staggering 58.59 per cent to
just over £6 billion. During the same period, Leasing & Asset Finance 997,114,216 -10.36 1,112,332,506
membership levels fell from their peak of 750
firms to the current level of just less than 600. Invoice Finance 831,268,229 20.88 687,700,326
So although membership has dropped by
around a fifth, business levels have plummeted Vehicle Finance 758,702,255 -30.08 1,085,176,276
by over half.
Buy-to-let 476,178,959 -87.85 3,918,913,339
Casualties
Three of the main casualties have been buy-to- Bridging 190,530,814 -77.22 836,571,372
let mortgages, bridging finance and the
category with the enigmatic title of ‘Other’. The Other 360,491,314 -82.61 2,073,339,407
downturn in the first of these categories, buy-
to-let mortgages, has been well publicised as
lenders distance themselves from this risky GRAND TOTAL 6,397,005,423 -58.59 15,449,746,214
sector of the market.
October 2009 Mortgage Introducer www.mortgageintroducer.com
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