Sub-prime home loans 'disappearing'

Link to the article: Channel 4 News

Last Modified: 07 Apr 2009
Source: PA News

The sub-prime mortgage market has all but disappeared as lenders become increasingly risk averse, figures have shown.

There is now only one provider, Platform, with products that are widely available to people with impaired credit histories, and it offers just eight different products, representing a steep decline from the 1,599 mortgages on offer across all providers a year ago, according to Moneyfacts.

The number of sub-prime loans that are widely available has dived from 204 to just eight during the past week alone, leaving the products accounting for 0.5% of all mortgages, compared with 12.3% at the end of March.

At the same time, the rates charged on the loans are prohibitively expensive, with sub-prime borrowers looking at paying interest of at least 8%, despite the fact that the Bank of England base rate is now at a record low of 0.5%.

The steep fall in the number of sub-prime mortgages available has been driven by GE Money Home Lending's decision to limit the volume of business it does.

Link to the full article: Channel 4 News PA News