IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Sub-prime Mortgage Lending in the UK

Listed author(s):
  • Mark Stephens
  • Deborah Quilgars
Registered author(s):

    This article draws on a census survey of lenders and other published evidence to provide a critical overview of the sub-prime mortgage sector in the UK. Its origins and growth are identified as lying in a combination of changes in the structure of the economy and the introduction of automated credit scoring. The sub-prime market serves a diversity of needs with a clear function of credit repair being suggested by the high proportion of re-mortgages into the sector. Sub-prime borrowers are drawn from across the social and economic spectrum yet significantly higher levels of default are found among them. While much of this additional risk is inherent in the market the institutional structure that underpins sub-prime lending in the UK appears to amplify the levels of risk unnecessarily. Sub-prime lending is conducted disproportionately through centralised lenders reliant on securitization for funding and using brokers to originate loans. This builds a series of information asymmetries into the system and has exposed borrowers to volatility in rates and credit supply that occurred from the fall in world-wide liquidity in 2007. It is suggested that in principle risks could be better handled by integrating the sub-prime market within the mainstream market and applying a graduated approach to risk-based pricing.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Taylor & Francis Journals in its journal International Journal of Housing Policy.

    Volume (Year): 8 (2008)
    Issue (Month): 2 ()
    Pages: 197-215

    in new window

    Handle: RePEc:taf:intjhp:v:8:y:2008:i:2:p:197-215
    DOI: 10.1080/14616710802037458
    Contact details of provider: Web page:

    Order Information: Web:

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:taf:intjhp:v:8:y:2008:i:2:p:197-215. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Longhurst)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.