As the summer finally comes around this year, the financial world is offering up some encouraging news stories. One reason to be optimistic is the strong performance of 'challenger banks', which shows the market is in good health.
Sainsbury’s Bank, in its preliminary results for the year to 12 March 2016, reported strong financials, with increases in income, underlying profit and funds being advanced to customers, in addition to strong growth in insurance products.
Based on “strong trading performance and the trust people have in the Sainsbury’s brand” the Bank has announced its intention to launch a range of new mortgage products in 2017, to complement its existing financial services portfolio. More competition for the established banks and more choice for the consumers is a big positive for the UK mortage market.
Virgin Money is another challenger with a positive story to report. In the bank's first trading quarter to 31 March 2016, Virgin Money reported a “record start” to the year for mortgages. Against the same quarter of the previous year, the bank saw strong increases in residential and buy-to-let mortgages.
Both banks suggested that good quality products and services were the secret to their recent growth and success. What we have seen in the past few years is a shift in lender confidence - both in the economy and in consumer ability to repay loans.
After the financial crash of 2008 consumers had a limited number of mortgage lenders to borrow from. The fact that there are a range of successful banks in the sector can only add to the recovering economy.
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