Wednesday

UK's subprime market in decline

Lenders are finding it increasingly difficult to find funding for sub prime mortgages. Investment banks have been hit hard by the troubles facing the US sub prime market and therefore are less willing or able to securitise the mortgage books of UK sub prime lenders. The number of products available in the UK subprime lending market has declined by 71% over the past year. The subprime market – based on giving credit to higher-risk borrowers and therefore charging a higher rate of interest – has been in the frontline of the fallout from the credit crunch. The latest withdrawals from the market have come in what appears to be a second phase of tightening.

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