The ‘adverse credit’
mortgage market seems to grow every year. According to new data released by the Council of
Mortgage Lenders, people who have had previous
credit problems now account for 5 per cent of the total
mortgage lending market.
Bad credit, or
adverse credit,
mortgages are therefore the second largest specialist sector behind
buy to let mortgages .
The Council of Mortgage
Lenders used data from their regulated mortgage survey and found that around half of all
credit loans are made to those people who fall into the ‘low adverse’ category. This could mean a single missed
payment, or a similarly minor disturbance in an otherwise good
credit record. Under a quarter of
lending is to those in the ‘high adverse’ category.
Furthermore, the
CML found that over two thirds of
adverse credit mortgages come from
remortgages . The CML profiled a typical
adverse credit
borrower . They were likely to be slightly older,
self-employed, and to have mortgage
repayments that take up a higher percentage of
income .
It is expected that this year, with
interest rate increases on the up, more borrowers than ever before will fall into the light adverse category.
