We’re just coming to an end of day two at the Global ABS conference. Funding is widely available and funders are willing to do deals across various asset classes and especially UK property-backed lending.
I’ve had interesting conversations with many lenders and funders and all mortgage related products are sought after currently, from near prime, through to equity release, bridging and development finance. This is excellent news for our industry – especially the specialists.
Private Credit – in basic terms where funding is made available from non-bank sources such as institutions and even HNW individuals – is growing rapidly with the worldwide market estimated to now be over $1 trillion.
“Benefits of this funding is often there is more appetite for risk.”
Benefits of this funding is often there is more appetite for risk and deals can be more individualised than through bank lines, but the funders in return command a larger margin than more traditional funding. But a pool of private credit loans is still securitisable.
EQUITY RELEASE
Equity release is very much represented out here with many UK and European companies looking to increase liquidity into the market. This bodes well for this sector which most seem to think could be on the verge of larger scale growth.
Overall, there seems to be good levels of funding diversification in a world where UK Residential Mortgage-Backed Securities (RMBS) are pretty stable, which means there is possibly more appetite for risk.
“There seems to be huge opportunity for originators and investors to trade profitably.”
This usually means better margins for all parties to a transaction. Buy-to-let and second charges are both heavily on the funders’ radars which is great for our specialist lending community.
In summary, I was expecting a positive conference but so far, and with a day to go, I’d say there is a very bullish attitude and there seems to be huge opportunity for originators and investors to trade profitably and create more volume in the UK mortgage marketplace.
