UK Banks Relax Mortage Rules

Self-employed and people in the UK with a bad credit history are
finding it easier to obtain a mortgage, according to the
independent market Datamonitor. Their research published this
summer shows that the number of people who had previously been
considered as being too high a risk to be able to borrow money
for a home, are now being offered mortages. Datamonitor suggest
that the lending banks have eased their rules because the
mainstream market is saturated. In fact last year the rate of
growth of lending to people who were previously considered too
high a risk, was double that of "mainstream" UK mortgage lending.

Although on average 9 million adults a year are refused
mortgages because they have too low a credit score, an estimated
£ 40 billion in mortgage loans was awarded to people who either
had a history of bad credit, or were self-employed. This is a
rise of nearly 10% compared with 2003 and is evidence of the
banks relaxing their credit rules to open up new markets.

Self- employed and high risk creditors have not only seen an
improvement in their chances of obtaining a home loan, according
to Datamonitor. The number of people who were previously
considered "unsafe" self employed or those with a poor credit
history

Who work for themselves or who have had previous debt problems
will find it easier to get a credit card too, rising from 9.5
million to 13 million by 2009 according to a Datamonitor
forecast.

Put simply, mainstream banks and credit lenders are finding it
harder to find new customers in the mainstream market, and may
be easing their rules to award credit to groups previously
thought to be too high a risk. This may may be good news for
these peole who have found it hard to get credit in the past.
Some analysts, however, are warning of increased levels of bad
debt in the future.