Sub-prime lenders ‘pulling in products’

People who have sought a debt consolidation loan in the past or who have a bad credit history may have trouble finding a mortgage from a sub-prime lender, according to a first-time buyer solution provider.

Paul Holmes, chief executive officer of FirstRung, said that sub-prime lenders are withdrawing some of their mortgages for first-time buyers, something that could affect those that have struggled with debt in the past.

“What we are seeing already is the sub-prime lenders withdrawing their affordability-based mortgage products for first-time buyers,” Mr Holmes said.

He added that 100 and 125 per cent products were being retracted “very quickly” by the sub-prime market. He referred to the current market as having a “sub-prime problem”.

The Royal Institution of Chartered Surveyors said this week that the cost of becoming a homebuyer has increased by 8.4 per cent this year, something that could leave Britons with a greater need to clear debt.