Bad Credit Loans Help Offset Economic Gloom and Negativity

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London (PRWEB) June 5, 2009

The loan sector devoted to bad credit loans is ramping up efforts to extend credit to people who need it but cannot qualify for a conventional bank loan, explains Andy Hygate from http://www.loansbadcredit.org.uk. Such action is needed in order to respond to a wide range of increasingly dire circumstances that weigh down the British economy.

Standard & Poor's, for example, has recently downgraded its overall credit outlook for the United Kingdom from "stable" to "negative." Standard & Poor's is one of the world's most respected rating agencies and routinely grades the quality of financial assets in order to assist shareholders, depositors, and other interested parties to make wise decisions regarding the value of their investments. The agency said that it lowered its rating on the UK based on the potential for the country's debt burden to grow so large that it will be equal to the value of 100 percent of the UK gross domestic product.

Meanwhile the Telegraph and Guardian report other distressful developments regarding the UK financial climate:

•     Mortgage lending recently declined nearly 10 percent month-to-month, according to the Council of Mortgage Lenders (CML). UK lenders have begun to withdraw some of their most affordable and attractive mortgage offerings, and that has made it virtually impossible for young British professionals to buy homes.
•     According to a newly published survey, 65 percent of those people who do not yet own their own home believe that they will never be able to afford one. 95 percent of all first-time home buyers now think that they will be unable to achieve their dream of home ownership within the next year, and only 10 percent feel that they can buy a home within the next two years.
•     The head of the National Federation of Property Professionals (NFPP) explained that banks are refusing to lend, but that the government is still not doing enough to intervene. A study conducted by the Building Societies Association revealed that mortgage company chief executives expect mortgage lending to shrink by nearly 25 percent this year, even as the savings levels of consumers also diminish.

A first-time buyer putting up a 10 percent deposit can expect to pay an interest rate of 6.09 per cent, for example, while those who can afford a 25 percent deposit will only have to pay 4.16 percent. At the same time, the majority of building society chief executives polled by researchers said the fees they are forced to pay to the Financial Services Compensation Scheme hurt their business. As a result, the majority of them believe they will soon raise their mortgage rates in an effort to pass the cost on to their customers.

While UK consumers are being denied affordable loans, nearly 1,000 people per week are being evicted from their homes. Repossession numbers have more than doubled compared to the same time last year. Conservatives claim that 3,000 families have asked for help under the Government's Mortgage Rescue Scheme, but that only one household has actually received assistance. The number of borrowers who are now delinquent on their mortgage payments has also grown considerably since the end of 2008, and the CML says that the number of repossessions on buy-to-let properties is also surging to levels that are about twice as high as those recorded last year.

But as the economic forecast grows worse and traditional lenders cut back on loan approvals, providers of loans for bad credit are actually increasing their loan activity. They offer financing options for mortgages, remortgages, and a variety of other needs, and welcome loan applications from people with damaged credit and lower than normal credit scores.

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