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First-timers bear brunt of sub-prime problems

Only 2 per cent of the UK population who could get a mortgage before the US sub-prime crisis will not now be able to.

At the Money Marketing sub-prime round table discussion last week, John Charcol senior technical manager Ray Boulger said he believes only a tiny percentage of the population will now not be able to get a mortgage or not be able to afford one.

Alexander Hall chief operating officer Andy Pratt said the first-time-buyer sub-prime sector will be hurt after several lenders pulled out of this market.

He said: “That is more worrying for the cycle of the housing market. I think that the key question is how quickly those lenders look at it and say it is still a valued product but it needs to be priced accordingly rather than just pulling the criteria, which is a kneejerk reaction.”

He added that the present situation continues, it will have an effect on the first-time market due to many FTBs having credit issues, often only in areas such as a late payment on a mobile phone contract.

Em financial managing director Roger Morris commented: “The one good thing that lenders have stop-ped doing is sub-prime to sub-prime with arrears. I just think that was a morally wrong product.”


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