The past three years have been turbulent across the globe, but things have been tougher in the credit crunch for the UK mortgage industry than most.
Brokers have been hit hard with conservative estimates from the Association of Mortgage Intermediaries suggesting that 20,000 of you have fallen by the wayside since the 9th August 2007 when the funding markets closed their doors and lenders started shutting up shop.
Those working at lenders also suffered fallout as funding dried up, new lending ceased and staff were sitting twiddling their thumbs.
Kensington chopped 65, Paragon lost 62, Platform shed 65, edeus was forced to let 30 people go, Mortgages PLC swung the axe through 20% of its work force and Wave said goodbye to 26 staff. All in a few months.
Heads also rolled at the top with Merrill Lynch, which owned both Mortgages PLC, Wave and provided financial backing for edeus, seeing its chairman and chief executive Stan O’Neal thrown over.
Bear Stearns went bust, Lehman started to wobble in early 2008, axing staff but continuing to lend under Preferred and Southern Pacific Mortgage Limited brands until it was left to topple by Wall Street’s finest in October that year.
Packagers didn’t look likely to survive the crisis with Praxis, which later went into administration, c2 Group and MD Nationwide all culling staff in a wild attempt to survive.
Kensington was bailed out by South African bank Investec just in time to scrape through the crunch intact but it was still forced to pull out of sub-prime lending in November 2007, and ceased lending altogether shortly thereafter.
Rooftop, Mortgages PLC, Future Mortgages, Home Funding, Victoria, edeus – all kings of the boom years lost their ways in 2008 with many winding up operations or sitting in a finance-free limbo.
By the close of 2008 the non-bank lender had all but disappeared from the market. edeus went pop in October 2008, morphing its business into due diligence firm Exact after being forced into administration. Checkmate has rebranded into Portillion, but is still waiting for its FSA lending permissions to come through.
Gross mortgage lending fell from £362,758 billion in 2007 to a paltry £143,633 billion in 2009. The Council of Mortgage Lenders estimates gross lending for 2010 to be in the region of £160 billion, but it has already announced that the market is tracking below that level, and its estimates may need to be revised down.
“Until things get better in the funding markets,” has been a ubiquitous phrase, heard muttered in the death throes of many a lender and those in the industry today say the funding gap remains the spanner in the works preventing the mortgage machine getting back into gear.