Jun 10, 2013 Philip Burgess
Over the past few years, many people ran into significant borrowing problems due to the effects of the Great Recession. The economic turmoil took a toll on the individual financial situations of a multitude of people across the globe, especially, it seemed, in the United Kingdom.
Many British citizens not only found it hard to make ends meet, but when that was next to impossible, they also ran into trouble securing funding from traditional avenues. Banks and bigger lenders were turning away anyone with less-than-perfect credit because they weren't considered to be a sure thing. That said, a lot of people found relief when they went to alternative financial companies, namely short term lenders.
No longer were these individuals tied down by poor or nonexistent credit scores - a lot of these institutions started taking things like the Payment Reporting Builds Credit scoring model into consideration, which also brings factors like positive histories of utilities payments into the fold when creating scores. As such, more and more consumers in the U.K. turned to such resources when they ran into trouble.
Although the economy is picking back up, tendencies have not changed, perhaps because lenders were so helpful when it seemed like all other doors were closed.
West One Index rising sharply
According to Mortgage Introducer, the West One Loan index, which takes into account mortgage lending industry activity, saw large gains within the last year. Many more Brits - consumers and business owners alike - are looking to short term lenders for help when they're trying to secure financing in numerous areas, especially home funding. Regarding mortgages, West One revealed that a record was set in the last year, as £360 million was given out in the form of secured loans by short term lenders in the last 12 months.
"The Bridging Index paints an illuminating picture of how the bridging industry is booming in contrast to the deterioration of business lending by mainstream banks," explained West One Loans Director Duncan Kreeger.
Another director, Mark Abrahams, told the news source that this resource is often good for consumers and business owners alike, as it allows the clients to get in with the lenders themselves, cutting out the middleman, which can help cement all terms and dates.
Moreover, Mortgage Introducer reported that another recent West One study revealed that four out of five mortgage brokers think that consumers are losing out because they don't understand enough about the alternative finance industry. Therefore, it would likely be lucrative for such companies to advertise and explain their services more.