I saw an article in one of the national papers the other day heralding the return of mortgages for people with an impaired credit history under the heading: ‘Sub-prime mortgages make surprise comeback in the UK’.
The heading made me really angry and the rest of the article didn’t help, being written in the style one would expect from a tabloid not a broadsheet. ‘Sub prime’ is such a derogatory term for someone who has had an unfortunate event in their life and may well have been a victim of the credit crunch. It makes people who have had financial problems sound like they are sub-human and is a term that we should all work to abolish.
In recent months there have been a number of lenders entering the market with mortgage products that cater for people with a less-than-perfect credit history. Lenders coming in with products for new sets of people should be welcomed.
These are not irresponsible lenders. They are lenders who feel that, with the right checks, they can lend responsibly to people for whom the path of life may not always have gone as smoothly as they would have liked. Often people with an impaired credit history are people who have lost their jobs or businesses, or got divorced. Many of those people are victims of the credit crunch – certainly not the cause of it as claimed, wrongly, by the national newspaper.
These are not people who should be despised, but often are people who are a victim of the biggest recession of our time. Hard working people, (to use the government’s most over-used phrase), who just want to be able to provide for their families. If at all other times of their lives they have paid their bills responsibly, why should they then be barred from the mortgage market and condemned to live in over-priced rental accommodation for the rest of their lives?
There is a real difference between people in these circumstances and people who willingly and intentionally choose not to pay their debts on an ongoing basis who are just being lured into more debt by evil lenders with cartoon pound signs in their eyes. This is an area of the market that was rightly abolished with the credit crunch.
So please, let us hear no more of ‘sub prime’. Responsible lending to people who can afford to pay their mortgage to enable them to buy a home is a good thing. People should not be condemned forever for mistakes or mishaps of the past. The new lenders are a positive force for good and we should be welcoming them into the market together with the solutions they bring for people who have for many years been excluded from getting a mortgage.