News & Events

Sub-prime market in decline

The number of lenders offering sub-prime products has dropped from 36 in July 2007 to just 13 today, a new study reveals.

Research by money advice website Moneyfacts.co.uk shows that up until July last year the sub-prime market was a growing sector offering 8,148 sub-prime residential mortgage products compared with just 1,252 in the present climate.

Mortgage expert at Moneyfacts.co.uk Darren Cook said the dip in the number of offerings was a result of the much publicised difficulties in funding this type of lending.

"Last year the market for sub-prime was so competitive that some rates being offered were only fractionally higher than standard residential rates" he said.

"Now, as lenders continue to factor in margins for higher risk, sub-prime customers are paying the price with rates up to 2.75 per cent higher than the same time last year."

He added that borrowers could be facing up to a £360 hike in their monthly repayments, which could be a step too far for the majority.

"As a result we are likely to see more people facing the prospect of repossession as more and more deals come to an end in the near future," he said.

This article is sourced from www.credittoday.co.uk

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