13-02-2008
50% of repossessions due to sub-prime lending
News by Adfero for Simply Business - independent providers of public liability insurance, business finance, landlord insurance, buy-to-let mortgages & commercial mortgages.
A majority of the repossession orders requested in the UK come from lenders engaged in sub-prime mortgage products, it has been claimed.
Findings by the BBC have revealed that while lenders within the sub-prime sector account for six per cent of the total number of mortgages currently in existence, their presence - in terms of repossession orders - exceeds 50 per cent.
"It should come as no surprise that those lenders dealing with borrowers with past credit problems are likely to have to deal with more cases of default amongst their borrowers," said a representative from GMAC-RFC, one of the UK's largest sub-prime mortgage lenders.
"Comparing lenders like GMAC-RFC with high street lenders is a bit like comparing apples and pears."
Official statistics show that the number of repossessions in the UK over the course of 2007 increased to a high of 27,000.
In related news, the lender Bradford & Bingley has reported a fall in profits after devaluing assets considered to be higher risk.