Some of the UK’s largest home loan providers have completely withdrawn from the sub prime market, revoking all packages, which carry a maximum loan to value of 125%.
Changes in the UK’s economy, namely the credit squeeze, have caused firms operating within the sub prime/adverse marketplace to completely rethink their positions. Home loan providers are no longer willing to take the additional risk as presented through “specialist” borrowers, with analysts suggesting that many are likely to stay well away until the market shows some definite signs of stability.
There are also a number of providers who are also rejecting applications from borrowers, with a loan to value of 100%. Statistically, more than 40% of the FTB market could be excluded from the borrowing fold as a result of this move, which is likely to have a major effect on the housing market in general.
One industry speculator commented that unless a firm is willing to step up to the table, and facilitate the needs of the sub prime market, an economic reshuffle is inevitable.
