New lender launch signals checkmate to the credit crunch

"Today's announcement by Checkmate Mortgages that it has obtained sufficient investment backing to allow it to launch as a new mortgage lender early next year is a superb achievement by Stephen Knight and his small team in this market.

It is not only a ringing endorsement of Stephen's expertise, it is also a vote of confidence in the future of the UK property and mortgage market", comments Ray Boulger, Senior Technical Manager at the UK's leading independent mortgage adviser John Charcol.

"The principle new backing is from the Rothschilds - RIT Capital Partners Plc and Lord Rothschild's family interests. The Rothschilds built their fortune by getting their timing right, as well as choosing the right investments. The timing of purchases was dictated by taking a view that the market had bottomed out rather than trying to pick the bottom."

Boulger continues, "I have been saying for the last month that we will look back on June/July this year and say that it was when mortgage rates peaked in this cycle. I am now even firmer of this view and the timing of this investment suggests that the Rothschild management also believe this. With Checkmate having raised much of its launch capital from the private equity sector and Blackstone looking at Paragon, private equity is calling an improvement in the market by early next year.

"With Bank Rate likely to be falling again by early next year and additional mortgage funding coming into the market from private equity investment there are good grounds, contrary to the view of many economists, for thinking that house prices will bottom out in the first half of next year."

Boulger concludes, "There is still no rush to buy but once prices stabilise, let alone start to creep upwards again, buyers will no longer be in such a strong negotiating position and so there is a good argument for those who want to buy and are able get finance to start actively checking out the market with a view to buying if they spot a bargain."