A number of lenders, including GMAC-RFC, have changed criteria and increased rates in response to continued market turbulence.
Other lenders have postponed their re-entry into the sub-prime market after withdrawing products. Investec-backed Infinity Mortgages and buy-to-let specialist UX Mortgages, which is funded by Infinity, say they have suspended offer production and are unable to commit to funding pipeline business.
GMAC-RFC will no longer accept unlimited adverse business and has reduced its maximum loan to value to 90 per cent from 95 per cent.
It is increasing rates by 0.75 per cent on its sub-prime range and 0.5 per cent on its mainstream, self-cert and buy-to-let products. GMAC only repriced its current range last week but head of marketing Jeff Knight says the latest move is a response to the market.
Investec-backed Unity Homeloans, which withdrew its sub-prime range two weeks ago, says it is still going over product options. Newly appointed chief executive Paul Thomas, who replaces Ian Nelson who is retiring, says it is proving difficult to price products but expects to relaunch in a couple of weeks.
Victoria Mortgages is increasing sub-prime rates by 2.5 per cent and will relaunch at the end of the month.
DB Mortgages has tightened lending criteria on sub-prime and light BTL products. It will no longer accept first-time buyers for its sub-prime mortgages and has withdrawn the selfcert option. It will also no longer consider those who have missed payments in the last three months for all sub-prime loans and second charges will no longer be accepted.
GMAC head of marketing Jeff Knight says: “Rates have been artificially low this year with new competition in the market. This is now forcing rates back to the right level.”