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‘People with poor credit are better off renting’

by Guy Anker

High-adverse lenders have come under fire for offering “unpleasant” products that only help people get further into debt.

Infinity Mortgages managing director Matt Gilmour, speaking at the CML annual conference, said some lenders are failing to assess affordability on products which are often unsuitable for customers.

Gilmour suggested that people with poor credit are better off returning to the rental sector rather than taking out mortgages that could later get them into trouble.

He also claimed that the lowering of credit requirements by lenders is causing nervousness among investors looking to buy bonds from securitised loans.

Gilmour said: “There is a lowering of the credit bar in the non-conforming market and there are unpleasant products with limited requirements for demonstrating income and quality of collateral that those loans are secured on. It is not necessarily good for the customer and it is maybe better to go back to the rental market to clean themselves up.

“The markets only understand mortgages at a portfolio level and any deterioration will cause capital mark-ets to wobble.”

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