Specialist lending doesn’t mean specialist rates anymore, said Rob Barnard, director of sales at Pepper Homeloans, adding sub-prime is ‘coming back.’
Speaking at the Simplybiz conference in the West Midlands yesterday, Barnard said this time, the market is different with no self-certification, no 100%-plus lending and tighter lending criteria on buy to let.
“It’s totally different to before because it has to be affordable, he said.
Pepper surveyed brokers on cases which they had found difficult to place.
The findings revealed 20% of those difficult-to-place cases were adverse credit, 13% self-employed, 13% older clients, 6% expat cases and 4% of the cases had complex incomes. Just 3% of hard-to-place cases were debt consolidation.
However, 30% of all advisers said they had seen an increase in clients with adverse credit.
This is unsurprising said Barnard, given the four consecutive years of rising County Court Judgments (CCJs) to date, with £1.7bn registered in 2016. The average CCJ value has fallen to £1,711, with defaults coming from smaller bills like payday loans, mobile phones and other smaller types of credit.
“People will need guidance and help to deal with this issue,” said Barnard.
A subsequent specialist lending panel debate agreed the term sub-prime is still out of favour, but Barnard said 85% of brokers expect to place more adverse credit in future than the 56% who currently place this type of business.
Victoria Hartley is contributing editor at Mortgage Solutions, Specialist Lending Solutions, Your Money and Your Mortgage at London-based publishing company AE3 Media.
She has an MA in Radio from Goldsmiths after gaining a 2:1 in a Comparative American Studies BA at Warwick University. She also holds a TEFL qualification and taught overseas in Mexico and Japan from 1994 to 1997.
Her role includes editorial oversight of the news, analysis and features, event content management and strategic and editorial consultancy for the AE3 Media group. She is an experienced video, broadcast and live-event host and regularly chairs web and podcast debates and interviews.
Multiple award nominations have resulted in two wins: Santander Media Awards, trade journalist of the year and Headlinemoney Awards, mortgage journalist of the year (B2B). Here is one of the award-winning pieces: https://www.mortgagesolutions.co.uk/news/2011/07/21/exclusive-tale-bailey-fraud-witness/
Previous roles include editorships of Mortgage Solutions, consumer title What Mortgage and trade title Credit Today as well as a stint freelancing for a variety of outlets including The Guardian and Which? Money.
