US sub-prime crisis unlikely to affect long-term secured lending in UK

Posted 2007-10-16

Datamonitor, a financial industry analyst, foresees an “encouraging future” for secured loans in the UK, despite the recent credit crisis fallout caused by the sub-prime lending chaos in the US. 

The research has shown a growing trend in consumer demand for secured loans in the UK - in the not too distant future - regardless of the continuing crisis in the US, which is expected to last at least through the year 2008. Many analysts in the US concur that little recovery is expected for their lending markets until mid-2009.

Maya Imberg, a financial services analyst stated, “Some lenders will withdraw from the market for a short while before returning, thus affecting the market in the [UK], in the short-term, rather than the long-term.” 

In 2006, the total amount lent to consumers in secured loans was roughly £7.5 billion. And, at an average compound growth of 5% each year, consumer demand is likely to see the amount increase to £10.2 billion by 2011.

Datamonitor’s research also revealed a comparative increase in consumer debt of approximately 41% between the year 2000 and 2004. The over-all consumer debt index is also unlikely to wane from predictions of slight continual increases in the foreseeable future.

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