The Co-operative puts its faith in first-time buyers
Nov 07, 2012 (Datamonitor via COMTEX) --
The Co-operative Bank has used the FLS to bring out the most competitive first-time buyer mortgage in years. Not only will this boost the bank's already impressive reputation as a customer-focused provider, the move demonstrates its growing confidence and increasing appetite for risk.
In becoming the first provider to use the Funding for Lending Scheme (FLS) to bring out a truly competitive deal for first-time buyers, The Co-operative has taken a bold step to differentiate itself from its competitors by focusing on what has been seen as a higher risk segment of the mortgage market.
The Co-operative's launch of a fee-free 90% mortgage at a rate of just 3.99% is by far the best deal for first-time buyers to emerge since the onset of the credit crunch, and is noteworthy for several reasons. It is the first real sign that the FLS is starting to improve credit availability to underserved consumers, rather than just encouraging providers to lend more cheaply to already favored segments.
Most significantly of all, by breaking ranks with its rivals, The Co-operative is demonstrating both its renewed confidence in the first-time buyer market and a far more robust attitude toward risk. Given the current lack of competition in this sector, the bank is likely to gain significant market share in the short term.
Other providers will follow suit in due course, thus increasing the options open to first-time buyers. After more than four years of stagnation, The Co-operative's move marks a turning point for the mortgage market, with lenders once again actively competing for market share.
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