09 August 2012

The computer can still say 'no'


The Bank of England held the base rate for another month and we all breathed a small sigh of relief as some industry pundits had suggested that a reduction may occur.   Obviously it would be good for the consumer, but not so good for keeping the funds moving around the marketplace.   As it is, many are already enjoying a nice base rate tracker and sitting comfortably with no intention of moving, and why would they?  From the business aspect and funding lines, lenders need to turnover customers, attract new business and collect fees.   More money moving around is good news for the market; static money tends not to be!
With this in mind, and as I have not reported on the monthly “creditaction” figures for a while, here are some stark reminders of the state of the economy:
·         Average household debt in the UK (including mortgages) was £55,448 in June. 
·         The average amount owed per UK adult (including mortgages) was £29,687 in June. This was around 121% of average earnings.
·         105 properties are repossessed every day (based on Q1 2012 trends).
·         1,443 Consumer County Court Judgements (CCJs) are issued every day
·         314 people are declared insolvent or bankrupt every day
·         1,607 people a day reported they had become redundant between March and May 2012.
·         The UK population is growing by an estimated 1,342 people a day

Meanwhile, credit scoring is creating havoc for mortgage applications via high street lenders.  Most lenders credit score applications based upon the amount of credit you have, whether you are on the electoral role and your recent payment profile on any existing credit.  If the computer says ‘no’, you will tend to find all high street lenders doors shut to you.  But fear not, if you have a reasonable deposit and can prove all income, there are lenders who do not credit score, but will manually review and underwrite affordable applications on an individual basis.  AToM has access to a number of these lenders so don’t despair if the high street lender’s computer says no. If you fit the above profile, give us a call to see if we can assist.

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