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Tesco might be the biggest supermarket in the UK, but it’s still a minnow in the mortgage lending world. But that hasn’t stopped it offering a range of products this week that will excite borrowers, including rates of 1.99 per cent for 60 per cent loan to value customers. It just illustrates that meeting the needs of consumers doesn’t have to be the preserve of the established brands. Tesco, as a new entrant, is nimbler, with no legacy overheads that have to be factored into deals and a system custom built for mortgage lending, so it’s able to offer attractive products and win business from longer-standing providers. There are similarities with the peer-to-peer and peer-to-business lending markets too. Funding Circle, Rate Setter and Zopa, as the best-known operators in an emerging market have challenged the poor rates earned by savers and the high charges levied at businesses by the traditional funding providers, by creating a low margin service for both parties. With over £300m already loaned out through the market, it is certain to pose an increasing threat to mainstream finance. However, as that sector has evolved, new challengers have emerged, each finding their own niches, like rebuildingsociety.com or Funding Knight or Relendex, which is shortly to start in the commercial property space. Lenders wanting to secure best value for their investments might want to look at the less-established brands to achieve better returns because there is less competition and therefore less chance of them being undercut by rival bidders and of missing out on the most attractive investment opportunities.