Subprime mortgage lenders have seen a resurgence in Britain over the past year along with their peers offering high-interest personal loans and they expect Brexit to further boost demand.
The recent vote to leave the European Union is expected to make the economic picture gloomier for Britain, dampening growth, increasing joblessness and making it harder to get a mainstream loan.
Britons already owe almost 1.5 trillion pounds, according to data from The Money Charity, and the government’s paring back of social support mean many are forced to seek alternative sources of credit.An analysis by price-comparison website Moneyfacts.co.uk shows that the subprime lending industry in the UK is growing.
Its research shows the number of ‘adverse credit’ mortgage products or home loans to people with a patchy financial history, has more than doubled to 262 from 110 a year ago.”There are around 12 million people that the mainstream banks and financial companies will not lend to,” said John van Kuffeler of Non-Standard Finance, who also spent 15 years at the helm of Provident Financial PFG.L, the UK’s biggest doorstep lender.
Kuffeler predicted that figure could rise to 15 million people if there was a deep recession.Non-Standard Finance NSF.L typically provides loans of around 200-750 pounds for 33 weeks at an interest rate of up to 130 percent over this period. Borrowers are visited at home by agents who return to collect weekly payments….Reuters