Growth in specialist mortgage lending predicted

14-Aug-2006

First time buyers could benefit from the recent growth in near-prime and sub-prime mortgage lending, with around 52 per cent of clients approaching brokers for sub-prime mortgage products, according to recent research by Alliance & Leicester.

Interest in near-prime markets is currently around 50 per cent; near-prime mortgage products are potentially useful for first time buyers who may have weak credit ratings.

"It comes as no surprise that brokers are seeing an increase in the number of near-prime and sub-prime cases they are dealing with," said Mehrdad Yousefi, head of intermediary mortgages at Alliance & Leicester.

"It is encouraging to see that brokers say their clients know the value of these types of mortgages and that it is a good way of getting potential buyers on the housing ladder," he added.

Sub or near-prime mortgage products are traditionally attractive to clients who have either weak credit-ratings or have previously defaulted on debts.

Specialist mortgages are also attractive for the self-employed, who may have erratic earnings and consider a self-certification mortgage package to be an unsuitable option.

Despite the traditional dominance of niche mortgage lenders, mainstream product-providers and packagers are increasingly entering the specialist sector.

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