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THE SUN is adverse mortgage demand rising?

Journalist: Sarah Davidson, Freelance

ended 13. June 2023

Looking at the UK Finance numbers, lending by specialists that focus on adverse has gone up massively since 2020. 

Leeds, Kensington, Metro (will do manual underwriting), Pepper, Atom, Hampshire Trust Bank, Vida, Hodge, Darlington and Together did £5.4bn in 2020 and £10.1bn in 2021. 

Looking for comment on whether you're seeing more demand for specialist underwriting because of sub-perfect credit? 

Also - are rates charged at a premium? 

asap please!

4 responses from the Newspage community

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Editor
Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
There is a higher volume of customers requesting sub-prime lending, as higher rates have dictated they need to refinance credit which was once affordable. Some clients are being refused by your vanilla high street lenders whilst other are using a secured loan so they don’t have to refinance their mortgage which is on a low rate. Nevertheless, this will continue as rate rises are expected in the coming months. If the base rate goes a whole percentage point higher it could tip the housing market into chaos, not seen for over thirty years.
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Justin Moy
Managing Director at EHF Mortgages
There has been a noticeable uplift in enquiries where the root problem has been missed or late payments. Reasonably minor issues for most at the moment, but given the impact of higher rates and the increased cost of living, both brokers and lenders are getting ready to support more clients in this situation. Really important to speak with a Mortgage Broker, most will have access to a full range of lenders that will cater for most situations. There are plenty of smaller Building Societes that have some flexibilty with minor credit blips, as well as those specialist lenders who will deal with more complex cases, cascading clients through a number of deals to match their credit profile. High Street lenders will not be operating in this market for the time being.
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Gary Bush
Financial Adviser at MortgageShop.com
There is currently an increasing demand for mortgages from applicants that previously had an unblemished credit profile, they aren't seriously adverse but the odd missed payment here and there is a common sight now due to cost of living problems. We are also walking the minefield of Covid mortgage holiday applications where at the time the government told lenders to offer mortgage holidays while they forced the population to all stay at home - sadly now lenders seem to have forgotten what a mess the country was in at the time. For anyone with credit blips on their reports, they need to engage with a mortgage advice firm that has good knowledge of all the adverse credit arrangements that are available.
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Graham Cox
Director at Bridging Hub
Adverse applications are increasing, some of them resulting from financial difficulties during the pandemic, but some for more recent credit issues. The problem is the rates lenders charge. Except for those with minor credit impairment, bad credit mortgage rates are typically 1-2% higher than for a mainstream borrower. Which can make the mortgage unaffordable. It's a ticking time-bomb.