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Freedom Finance: What will 2016 bring to the lending market?
2015 saw a huge jump in lending to individuals, and these figures are still rising. In November, the Bank of England released its money and credit statistics and found that total lending to individuals had increased by £4.8bn in October. That same month, banks also lent more money through mortgages than at any point since the summer of 2008.
These large numbers demonstrate an important point: this is a good time for individuals who are looking for a personal loan. Competitive rate wars between lenders, better credit availability, historically low interest rates and stronger household finances have all helped fortify consumer confidence in borrowing over the past few years.
With the financial prospects for Britons on the rise, we are excited to see what 2016 will bring to the lending market. The specialist lending industry is growing steadily, with brokers and lenders working together to deliver products that cover a broad range of financial circumstances. However, it is vital that responsible lending, including the need for more sensible loan-to-values (LTVs), remains at the forefront of the industry’s mind as we move into 2016.
The New Year is also likely to see a gradual rise in interest rates. Even though the Council of Mortgage Lenders has predicted that the ‘overwhelming majority of borrowers will cope with the modest interest rate increases’ at the start of 2016, lenders and borrowers will need to remain cautious when dealing with a still fragile market.
The lending industry has clearly seen many successes in 2015, most notably the rise in consumer confidence. Going forward, we should capitalise on these advances by ensuring that the lending industry remains consumer-focused, so that those without perfect credit scores are not forgotten. In order to achieve this goal, however, lenders and borrowers will need to work together to consider all their options available, so that every loan offered is designed to meet each consumer’s individual needs and circumstances.
It’s also important to remember that headline rates aren’t available to all borrowers. If you aren’t a ‘perfect borrower’ (see our earlier blog) then the best rates on the market may be just out of your reach. But by using ‘soft search’, you can find the best loan rate available to you, without endangering your credit score.
Read more here.
Attributed to Nicola Georgiou, Managing Director at Freedom Finance.
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