LendInvest warns of mortgage volatility as it ‘tightens credit appetite’
Alternative mortgage lender LendInvest said it was tightening its “credit appetite” today as it grapples with the volatility that has shaken the market in the wake of the government’s so-called mini-budget.
Mortgage rates have surged in the past two weeks after Kwasi Kwarteng’s plans to slash taxes spooked markets and dramatically pushed up borrowing costs.
In its half year results, LendInvest said there was “considerable short term uncertainty around macroeconomic conditions” and it had scrambled to re-price products and stay open for new business.
“At the same time, we have tightened our credit appetite to protect investor returns given the heightened risk of falling property prices,” said Rod Lockhart, boss of the London-listed fintech.
The comments came as the firm revealed its funds under management had jumped by 20 per cent on the first half of its financial year, with £950m of lending headroom still to deploy.
Bosses slashed profit forecasts for the year however and said it was likely to now come in at the same level as last year.
“We have taken this cautious approach mindful of the significant difficulties in short term forecasting given the economic and market backdrop,” Lockhart said.
“We remain confident in our ability to deliver our future growth aspirations, maintain our progressive dividend policy and deliver shareholder value.”
Shares in LendInvest have plunged over 30 per cent today after the warnings to the market.
Mortgage lenders in the UK have been rocked by volatility in the past two weeks in the wake of the chancellor’s plans to slash more than £45bn taxes.
The expectation of rate rises by the Bank of England to combat the impact of the plans meant many mortgage lenders were unsure how to accurately price their products. More than 40 per cent of products were pulled from the market in the week after the budget as and borrowing rate soared.