Double rate hike from High Street Home Loans

The fallout from the US sub prime mortgage crisis and subsequent difficult market conditions continues to impact lenders in the UK sub prime arena.

High Street Home Loans (HSHL) increased its LIBOR discount and fixed products by one per cent on 23 August, and then some six days later, on 29 August, raised its rates again by a further one per cent.

HSHL a division of GMAC – RFC Limited says it has taken this step as a result of the unprecedented circumstances within the world's mortgage markets and although it feels this is a short term situation they feel it necessary to take this action at this current time.

Julia Harris, Mortgage Expert at Moneyfacts.co.uk, comments: “Consumers with less than perfect credit records have benefited from extremely attractive rates over the last couple of years, due to competition within this market keeping rates down. We are now seeing the margins between prime and sub prime residential mortgages starting to widen: unfortunately this will impact more on those that are already struggling.

“With signs that house prices are starting to cool, combined with current market conditions, mortgage applications for sub prime products are likely to come under closer scrutiny from lenders.”