United Trust Bank had revealed that 14.5% of asset finance brokers responding to its latest Broker Sentiment Poll believe that pricing in the asset finance sector is unsustainable and 37% expect to see lender pricing increase within the next 12 months.

However, 71% believe that current lender pricing is about right with a further 14.5% suggesting pricing is too high.

In addition, brokers were asked to select from which channel they felt they were experiencing the most competition. Top of the list was ‘Direct from High Street banks’ followed by ‘Other brokers’ in second place. The poll also revealed that brokers are competing against businesses self-sourcing finance more so than Vendor/Sales.

Keith Sangwin, head of sales – asset finance, said: “Competition in the asset finance sector is fierce with pricing down to pre-credit crunch levels. It is apparent there’s still a need for volume but as Brexit draws near, now under Boris Johnson’s leadership, the impact of a potential ‘no deal’ Brexit may place us in uncharted waters.

“The Organisation for Economic Cooperation and Development (OECD) predicts that the UK economy will grow by less than 1% in 2019 and 2020 if Brexit goes smoothly but may sink into recession in a ‘no deal’ scenario. Although 71% of brokers feel that current pricing is about right, funders may feel the need to review their strategies this side of 31 October, especially if it looks like a no deal outcome is most likely.

“Anecdotally, there are rumblings from some quarters that defaults are already increasing, perhaps foreshadowing worse to come if SMEs don’t get more certainty soon.

“At UTB our strategy will remain consistent. We continue to approve deals to sensible credits at competitive rates, price matching other funders when appropriate. And for occasions when quick, creative underwriting and a speedy completion is required, brokers know the UTB service is very hard to beat.”