Keywords
Citation
Turner, C. (2007), "Abbey ups the ante (mortgages)", Strategic Direction, Vol. 23 No. 6. https://doi.org/10.1108/sd.2007.05623fad.005
Publisher
:Emerald Group Publishing Limited
Copyright © 2007, Emerald Group Publishing Limited
Abbey ups the ante (mortgages)
Abbey ups the ante (mortgages)
Turner C. Marketing Week, 9 November 2006, Start page: 22, No. of pages: 2
Purpose – to comment on Abbey’s announcement that it will offer mortgages at up to five times a borrower’s salary. Design/methodology/approach – considers the repercussions of the announcement. Findings – Abbey’s announcement has led to warnings about saddling buyers with huge and unpayable debts and has also brought the issue of innovation in the mortgage market into sharp relief. Notes that some predict that a war over lending multiples will break out among the major lenders and fear a return to the boom and bust days of the early 1990s. Believes that the decision flies in the face of the industry’s move towards responsible lending and does nothing for the reputation of the Abbey brand and the financial services industry generally, especially with interest rates predicted to rise and house prices expected to fall as higher loan-to-income multiples increase risks for borrowers. Originality/value – suggests that the market should be looking at offset and interest-only mortgages.
Keywords: Abbey, Financial institutions, Mortgages, United Kingdom