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The number of individuals with bad credit who have had their application for a home loan rejected in the last year, has increased by almost 50 per cent according to a new study.

Industry statistics garnered by one of the UK’s leading price comparison sites has revealed that the number of rejected home loan applications has rose from 450,000 to more than ¾ of a million in less than 12 months. Experts believe that this vastly increased figure can be directly attributed to the sub prime “credit crunch” which is currently affecting the industry.

It is also believed that a series of interest rate rises during the first half of the year have caused a number of lenders to “tighten the reigns” with regards to actual acceptances, and that issues of affordability are causing many FTB’s to postpone their plans of buying a new home.  

The current state of the credit industry within the UK has caused a number of lending institutions, in many different sectors of the finance industry to heavily vet potential applicants before credit can be agreed. People with bad credit in particular are likely to be the hardest hit within the borrowing spectrum, however consumers who fall into other borrowing tiers may also feel the affects in the not to distant future.

Recent industry data reveals that cosmetic surgery has fast become one of the premier purposes for consumers acquiring personal loans.

Accordingly, almost 1 million Brits are planning to have some form of surgical procedure carried out over the next 12 months and are expected to borrow in excess of 1 billion pounds in the process. The study further suggested that Rhinoplasty, liposuction and denture remodelling are amongst the most common procedures for UK loan shoppers.

Commenting on the findings, one expert suggested that an increased obsession with celebrity was one of the primary reasons for the rising trend. Other reasons include advancements in the way in which such procedures are carried out, which have effectively reduced the cost of such operations and made self-modification assessable to the masses.

However, certain consumer welfare groups have expressed deep concern towards the rising trend, stating that some individuals who undergo surgery may actually require psychological help. It has been suggested that loans of this nature should not be made so readily available and the possible introduction of a pre-application screening process may be appropriate. The practicalities of carrying out such screenings however, remains to be seen.

Would be home improvers have recently been warned to tread with an air of caution when planning to remodel or renovate their properties, without the help of professional contractors.

According to a new study by one of the UK’s leading loan providers, hundreds upon thousands of Brits may be risking their financial health by opting to restyle their homes in their spare time. It is suggested that as many as half of all DIY projects result in failure, causing the hobbyist to actually lose value in their home opposed to increasing it. As an accumulative total, Brits have lost more than ¼ of a billion in the last year, due to project failure.

Statistics show that home improvement loans have surged in popularity over recent years, partly due to the number of TV shows produced around the subject, and partly due to a widespread desire by consumers to capitalise on rising house prices. However, very few homeowners who undertake such projects have any kind of experience in the field, with many taking on extremely complex projects such as extensions and causing serious damage to their properties as a result.

Consumers have been advised to ignore any temptation to destroy a dry wall, or add a conservatory without consulting with a seasoned professional beforehand.

According to a recent study, approximately 40% of all active financial agreements do not cater for the needs of the consumer as well as could be hoped.

A representative from one of the UK’s largest building societies claims that a vast number of personal loan providers and mortgage lenders are guilty of “sugar coating” the benefits of their products, causing some consumers to suffer financially as a result.

It is believed that a great many consumers become indebted due to lack of information on their chosen credit agreement, and even worse, a lack of affordability vetting by their chosen lender.

One expert commented that more needed to be done by industry regulators in order to ensure that credit providers are “whiter than white” with regards to the promotion of their products. Any type of fee or charge associated to any form of credit should be “bolded” in the exact same way as the wealth warnings which are tagged to secured loans, and typical APR’s which are tagged to credit cards.

Having bad credit may not be as restrictive in the hunt for a competitively priced personal loan, as many consumers are led to believe suggests a recent study.

Accordingly, individuals who have been refused credit in the form of an unsecured loan may still have a chance to attain credit if they are a homeowner and consider securing the finance against their property.

Having bad credit essentially makes any consumer’s proposition for a personal loan unattractive from perspective of their prospective lender, especially if no form of security is offered. However, if the bad credit borrower is a homeowner, it is suggested that the secured loans route may well return a number of plan options, which fall within the borrowers financial remit.

Sub prime borrowing has become extremely popular over the last few years, and as a result, many lenders are prepared to cater for the needs of such borrowers providing there is security in place.

Commenting on the findings one expert suggested that a rising number of people within the UK are now classed as having bad credit and due to the nature of the industry, there has never been a better time to qualify for such products.