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Lenders are cracking down on sub-prime borrowers across Britain and could force tens of thousands of homeowners into forced sales of their homes, property experts warned yesterday.
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Experts fear that the emerging British sub-prime crisis could further destabilise the domestic property market. As existing homeowners with particularly bad credit records – known as “heavy” sub-prime customers – come to the end of the cheap two-year fixed deals that were readily available until the summer, lenders are refusing to offer similar terms.
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Two years ago, borrowers could snap up a two-year fixed-rate deal for heavy adverse borrowers of 6.58 per cent. Hundreds of thousands of homeowners face being moved on to their lender’s higher rate, which typically will be at 9.5 per cent. On a £150,000 mortgage, this will leave homeowners facing an extra £280 a month in loan repayments. Thomas Reeh, of Black & White Mortgages, the sub-prime broker, said: “There are very difficult times ahead for customers who are habitual defaulters, or heavy sub-prime. They are unlikely to get a new competitive deal, and face significant pressure from their existing lender.”
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Experts fear that the emerging British sub-prime crisis could further destabilise the domestic property market. As existing homeowners with particularly bad credit records – known as “heavy” sub-prime customers – come to the end of the cheap two-year fixed deals that were readily available until the summer, lenders are refusing to offer similar terms.
...
Two years ago, borrowers could snap up a two-year fixed-rate deal for heavy adverse borrowers of 6.58 per cent. Hundreds of thousands of homeowners face being moved on to their lender’s higher rate, which typically will be at 9.5 per cent. On a £150,000 mortgage, this will leave homeowners facing an extra £280 a month in loan repayments. Thomas Reeh, of Black & White Mortgages, the sub-prime broker, said: “There are very difficult times ahead for customers who are habitual defaulters, or heavy sub-prime. They are unlikely to get a new competitive deal, and face significant pressure from their existing lender.”
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