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Warning about sub-prime mortgage growth

12/07/2007

The sub-prime mortgage market, which lends to people who cannot obtain a conventional loan due to bad credit or high levels of debt, has increased significantly during the past year, it has been claimed.

Figures from market analyst Datamonitor revealed that the sub-prime market rose 28 per cent during 2006 to reach £24.6 billion.

Additionally, the firm said that the market would continue expanding rapidly over the next five years, due to increasing consumer debt and a challenging financial environment.

"More consumers are unable to cope with meeting their financial commitments," said Maya Imberg, author of the report.

"With more defaulting or meeting payments late, more consumers will fall into the sub-prime population."

Datamonitor predicted that the market could grow by five per cent each year to be worth £31.5 billion by 2011.

The Financial Services Authority recently criticised the UK sub-prime mortgage sector for not taking enough measures to ensure borrowers could repay their loans.

Many debts unaffected by base rate cut 09/01/2009 - Yesterday, many borrowers welcomed the Bank of England’s base rate 1.5% base rate – an historic low 08/01/2009 - Today’s base rate cut by the Bank of England’s Monetary Gas price cuts expected 07/01/2009 - Energy company Scottish Power has announced the launch of a Personal debt about £1.5 trillion 07/01/2009 - The UK’s personal debt stands at around £1.5 trillion, according