Market for bad credit mortgages could improve in 2008

At the moment the global credit crunch is making it harder for people to obtain adverse credit mortgages, but the situation is likely to improve during 2008, an industry expert has said.

Last week, the BBC reported that lender Kensington Mortgages was set to withdraw its range of adverse credit mortgages as a result of tightening credit conditions.

A Council of Mortgage Lenders (CML) spokesperson, Sarah Robson, confirmed that the current market meant it was hard to get bad credit mortgages.

However, she explained: "The general expectation at the moment is that there will be a reduction in interest rates next year. That will ease the pressure on some borrowers … It does give some borrowers hope.

"Our October 2008 housing market forecast was for base rates to fall to five per cent by mid 2008."

Ms Robson said that it was possible that people with bad credit mortgages could remortgage to more competitive deals "if they did have a good credit history for five years straight".

A recent report suggested that more and more people were opting for joint mortgages in order to get on the property ladder and build up their credit history.

Related Articles

The Mortgage Warehouse offers Debt SolutionsFormer HBOS boss feeling positiveBank launches liquidity schemeGovt plan may bring back sub prime mortgagesLess than one-in-five mortgages last year sub-prime