UK sub-prime mortgages 'booming'
Britain's sub-prime mortgage market grew by 28 per cent in 2006, research from analyst firm Datamonitor suggests.Sub-prime mortgages, which cover individuals unable to secure a mortgage from mainstream providers because of bankruptcy, poor payment records or other reasons, totalled £24.6 billion in 2006 and could reach £31.5 billion by 2011, today's report claims.Datamonitor believes buoyant economic conditions and the ready availability of credit are driving the current growth, with low unemployment, strong property prices and low interest rates all contributing to high levels of consumer debt at present.The recent slight deterioration in the economic situation is good news for the sub-prime market as it means more people will be rejected by conventional mortgage providers, Datamonitor says.However increased consumer indebtedness also means the market will carry more risk as the danger of a sudden increase in defaulters rises.Today's report say the crisis in the US sub-prime market, which has seen this scenario become reality in the past year, should not be lightly dismissed by those relying on its British counterpart. Report author Maya Imberg said: "Despite the argument that they have sophisticated underwriting models in place, UK sub-prime lenders should take the US sub-prime mortgage crisis as a warning and ensure they are not over-exposing themselves to highly risky loans."
Share this..
Related stories
UK government pledges to spend whatever it can to keep people in employment
As we approach the next general election it is no surprise to see Alistair Darling, the Chancellor of the Exchequer, suggest that the UK government will do everything within its means to keep people in jobs, no matter what the cost. Even though UK national debt has now topped £1 trillion and the annual budget deficit is set to top £175 billion this year it seems Alistair Darling is set to pull y...
Read MoreUK tax authorities confirm 27 MPs under investigation
The UK tax authorities have today confirmed that 27 members of Parliament are currently under investigation regarding their expenses. Not only are MPs under pressure from an internal parliamentary investigation into expenses, but the tax authorities are also investigating whether any tax laws have been broken by the 27 MPs in question.
In a rather interesting development, the tax au...
German authorities demand international financial tax
Angela Merkel, the Chancellor of Germany, has today issued a statement calling on all international partners to move towards an international financial tax. Amid signs that investors are losing confidence in the Euro, Angela Merkel believes this would be the perfect opportunity to issue a "signal of strength" to show that the EU is well-financed and well-positioned for the future. The stateme...
Read MoreLoan rates 'highest for 7 years'
It was announced yesterday that loan rates have reached their highest point for seven years, as lenders tighten their deals due to the pressure of the credit crunch - passing the risk of higher costs to their customers, rather than trying to solve the problem themselves. The average loan rate is now as high as it was in 2001 for the first time, highlighting the real problems the UK economy is faci...
Read MoreCouple plan cut-price 'credit crunch wedding'
A credit crunch-hit Devon couple have not let the financial crisis derail their wedding plans.Instead, Christopher May and Odette Fenwick will go ahead with the ceremony next weekend on a budget of just £500, the Daily Mail reports.The tight-fisted twosome are spending just £40 on the buffet, while 19-year-old Odette's wedding dress is setting her back just £52.A bargain bucket £43.50 civil ce...
Read More