Recent reports have shown that the loans market continues to suffer as a result of the global credit crunch, with rates on personal loans continuing to soar despite base rate cuts, and with the number of sub-prime mortgages available on the market falling rapidly. According to industry officials the number of lenders offering sub-prime mortgages has fallen from 32 to just 20, and consumers looking for personal loans are having to pay out far more in interest rates.

A number of sub-prime lenders have recently announced that they will no longer be considering new loans until further notice, and some lenders have stopped offering sub-prime mortgages altogether. This means that those with damaged credit will find it increasingly difficult to get a mortgage loan, and even if they do they are likely to pay way over the odds due to the lack of choice that is now available in the sub-prime mortgage sector.

In addition to the number of lenders offering sub-prime mortgages falling from 32 to 20 since this time last year, the number of products available to those with damaged credit has also plummeted by a massive 71%, falling from 6501 to 1867.

One financial analyst stated: “The latest withdrawals from the market have come in what appears to be a second phase of tightening. Lenders are facing up to the reality that things are not going to get better in the near future: in fact, it seems that there is more blood on the carpet yet to be spilt. Although growing numbers of borrowers are set to slip into sub-prime status, the market shows no signs of being able to satisfy this heightened demand.”

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