Those needing a CCJ loan may need to wait quite awhile before banks are willing to even speak to them, according to many analysts. The fears on bad credit loans are spiking and many banks are simply unwilling to take any extra risks. In addition to a lack of available CCJ loans, banks are also unwilling to offer LTV’s greater than 100%. Although a few banks in the UK have continued offering CCJ loans and high loan to value ratios, the majority are pulling back, at least for the time being.
Ray Boulger of John Charcol stated, “Lenders are leapfrogging each other - no one wants to be at the top of the ‘best buy’ tables as they can’t cope with the demand. So they are pulling their products or putting their rates up at short notice. “In a normal market this [lack of competition] would be fantastic. But today, they don’t want the extra market to skew their loan book.”
Many are hoping that an interest rate cut will turn things around, but whether or not it will truly help is not yet clear. Melanie Bien of Savills Private Finance stated, “The connection between interest rates and mortgage rates has become much looser. The rate cuts are having less of an impact.”
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