Adverse credit takes bigger chunk of mortgage market
Published On 15 November 2006
Adverse credit mortgages accounted for five per cent of the home loans market last year, according to industry figures.The Council of Mortgage Lenders (CML) said adverse credit mortgages were now the second biggest specialist sector after buy-to-let.
CML's figures, which exclude the relatively new 'near sub-prime' category, showed that half of adverse credit customers were 'low adverse' and only a quarter were 'high adverse'.
"We believe that the adverse credit mortgage market, although higher risk, plays a valuable part in helping many individuals who encounter short-term financial difficulties to rehabilitate their finances and migrate back to prime products," noted Bob Pannell, head of research at the CML.
"It is a real testament to the dynamic and innovative nature of our market that UK lenders are able to offer an attractive range of mortgages to suit these different circumstances," he added.
Despite rising house prices and the prospect of further increases in the cost of borrowing, Britons remain desperate to get a foot on the property ladder.
Adverse credit mortgages provide an opportunity for people to buy, who would otherwise have to remain in rented accommodation.
