View more on these topics

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.”

Recommended

FSA highlights changes to unit-linked investment regime

The FSA is to introduce changes next month to allow life insurance companies to invest in a wider range of unit-linked assets.The changes, which come into effect on October 6, are part of the regulator’s move to a more principles-based regime for unit-linked investments.The current ‘permitted links’ rules governing which assets the unit-linked insurance sector […]

Fed cuts but faces dilemma

The US Federal Reserve’s decision to slash the funds rate by 50 basis points has been welcomed but fund managers warn the cuts are only likely to b a temporary measure due to inflation concerns.The funds rate was cut to 4.75 per cent last week and the discount rate was also cut by 50 basis […]

Tripartite failed first big test, says CBI

The tripartite arrangement between the Bank of England, the FSA and the Treasury that was designed to maintain financial stability failed its first big test, according to the CBI.

US loan growth is not painting a pretty picture for the US economy

Written by Mike Riddell One of the current big debates in global financial markets is whether investors should believe ‘hard’ rather than ‘soft’ data, where the usually reliable business and consumer surveys have been suggesting strengthening in global growth momentum for some time now, while the economic data that feeds through into the Gross Domestic […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment