Lenders changing their lending criteria

UK007BullDog

http://www.bloomberg.com/apps/news?pid=20601109&sid=aLHJ4TKSRS90&refer=exclusive

Very interesting read.

Lenders changing the way they are going to lend which seems to hit FTB's and subprime lending.

MarkyMarkD

I don't believe it, although it's interesting.

The UK mortgage market is nothing like the US market. UK sub-prime is FAR higher quality than US sub-prime.

All that's going to happen in the UK is that lenders are putting their rates up significantly because:

(1) LIBOR rates have gone mad so the mainly wholesale funded lenders who specialise in sub-prime are incurring higher funding costs; and
(2) Sub-prime lenders are temporarily less able to securitise their lending so some of them may go for margin rather than volume.

Nothing in there is particularly indicating that lending criteria will be tightened. But rates WILL increase (and already have significantly done so).