Kensington Group Ditches Adverse Loans Range

Fri, 23 Nov 2007

Kensington Mortgages, Britain’s first sub-prime lender, has pulled out of the sub-prime mortgage market due to current conditions in the sector. The specialist lender will today withdraw its entire "adverse" loans range at the close of business, further highlighting the extent of the deepening sub-prime crisis in the UK.

An email sent to mortgage brokers by the troubled lender said it is looking to increase its focus on low-risk products, rather than the "adverse" loans for which it is known.

The lender claimed in the email that the move was temporary and the "result of the recent further tightening in the global capital markets".

Sub-prime or adverse loans are offered to homebuyers with poor credit histories or unpredictable incomes .

Chief executive of Kensington, Alison Hutchinson, said that "tough times call for tough decisions" and that demand from investors for adverse credit shows no sign of returning in the next few months.

Kensington had already acted in September by cutting the proportion of a home's value it was prepared to lend to 75 per cent, while further plans are in place to re-price its range of prime mortgages and remove some of its other products such as a self-certified buy-to-let mortgage for first time buyers .

Melanie Bien, director at independent mortgage brokers Savills Private Finance, said: "Kensington was the original sub-prime lender, whose success encouraged many other lenders to move into the sector."

"If Kensington can see no opportunities in sub-prime, what chance have other lenders with less experience got?"

Bien added that the news was the latest evidence of tough conditions within the market as a result of the credit crunch, and how the after-affects are "likely to linger".

Kensington Mortgages became part of the South African investment bank Investec in August in a deal worth just £283m.
add to favouritesnewsletterlink to this pagesend to friendpost comments

Link to this page

Copy and Paste the following HTML into your page.


 

Business Newsletter

Please enter your email below and subscribe to our monthly newsletter

Reduce mortgage paymentsSave on Your Mortgage

Would you like to save money on your mortgage? Fill out our quick mortgage enquiry form.

Health InsuranceProtect Your Health

Find Critical illness, Life and Private Medical Insurance PMI policies.