Starling snaps up mortgage book, ahead of float next year

Starling Bank has bought a mortgage book worth around £1billion to turbocharge growth ahead of a flotation as early as next year.

The start-up, founded by Anne Boden in 2014, is understood to have bought the home loans portfolio from Kensington Mortgages, a specialist lender.

Kensington focuses on mortgages for customers who might not get the best deals elsewhere and those who are overlooked by high street banks, such as the self-employed.

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Here’s me, self employed with not such a steady income looking like Starling may offer me a mortgage :thinking:

Starling would be incredibly clever to snap up the self-employed. A lot of the time they make a good portion more income than is on paper because of expenses :wink:

So if they’re willing to put the extra work in, not a bad idea to cross-sell mortgages

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Starling Bank is gearing up to buy a lending business in an attempt to fuel growth ahead of a stock market flotation.

The digital bank – which is backed by large institutions including Fidelity and Goldman Sachs – is on the hunt for companies ranging from small business lenders to mortgage providers.

Anne Boden, founder and chief executive of Starling, told The Mail on Sunday: ‘We’re looking for a new lending business. We’re out there looking for one or more lending platforms. We have deposit balances which we need to make work for us.’

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Not all self-employed people will have lots of income and expenses don’t help with affordability.

Good luck to them but I don’t really see much value in their business including no USP. I can see Chase snapping at their heels and even overtaking them in the near future plus the old guard copying many of their features.

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Lots of the self employed spend more than they really should through expenses to cut down on tax burden, but could afford X, Y, Z.

Saw lots of people on a Twitter thread complaining about making more than enough money to cover it but the bank seeing low net profit of their business and small(er) amounts of salary taken as a red flag.

In reality they were paying for very nice cars, lots of takeout etc. more than enough capacity to take more money from the business but the net profit was written down to reduce tax burden (i.e. paying off business loans in an extra chunk at the end of the year).

There’s a market of these people who are globally entirely untapped !

That is £££ for the first to get there.

I don’t think so. N26 tried with a massive launch and still failed, I think we should remember that.

Chase even admitted they’re here for the long-haul and expect to lose money for a considerable period of time, I recall reading in another thread on FTF.

The old guard should be a scarier beast, considering it’s a lot easier to maintain a monopoly than break one.

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Some interesting points (and I agree with several of them :relieved:).

The fact that some self-employed people have unguaranteed disposable income doesn’t equate with a good risk nor that someone can get a lease a nice car or can spend lots on entertainment doesn’t mean you want to loan them money

A number of players are already moving to cater for self-employed and freelancers who have a stable background and history. Other niche players might have a higher risk appetite.

As for N26; their key market is Germany and the Eurozone. I really don’t see parallels with Chase; I’ve yet to see anything from Monzo or Starling that can’t be be replicated and Chase have much deeper pockets to do it with.

Of course, however, whether Chase will spend that sort of money remains to be seen - an exec at Chase can decide not to bother and shut the whole UK consumer business down and it wouldn’t have any sort of impact on the entire group at this stage.

The entire reason Monzo and Starling exist, however, is their UK operations. Their ability to compete in the UK is existential. Not so with Chase, so simply having deep pockets doesn’t mean they’ll use them.

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It’s not unguaranteed disposable income. The situation I described was stable, but whittled down for tax purposes.

Much deeper pockets but why would they spend as much here as in the US where they can make a lot more? U.K. market just isn’t as profitable