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Loans Providers Update Plans

A series of unprecendented events have together caused a continuing stream of updates in the loans plans offered by the mainstream lenders in the secured loans market.

Increased concerns abut lending to sub-prime borrowers, which in turn led to serious liquidity restrictions in the wholesale lending channels has now been joined by further worries about the future of house prices in the UK.

Together these factors have meant that the acceptance criteria being used to approve or reject loan applications are undergoing continuous change.

The primary changes are to the loan to value percentages that lenders are willing to approve, the maximum size of any single loan and the quality of credit scoring required for loan approvals.

When house prices in the UK were surging forward year on year, loan providers had few concerns about lending as much 100% of the available equity in a property, but with numerous predictions of a dramatic slowdown in house price growth and a possible drop in prices, those 100% levels have quickly dropped to 65% or even 60% in some cases.

So not only are loans harder to find, they are likely to be smaller and slightly more expensive, despite the recent drop in interest rates and the additional liquidity provided by the worlds central banks.

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