10 years since the Northern Rock crisis
September 18th, 2017
This September marked the 10 year anniversary of the day when Northern Rock collapsed and marked the start of the global “Credit Crunch” hitting the UK finance market.
Since the Northern Rock crisis, changes were implemented to secure customer’s savings up to £75,000 by the Financial Services Compensation Scheme (FSCS).
A mortgage popular product offered by Northern Rock prior to the Credit Crunch was lending up to 125% loan to value, meaning that mortgage applicants did not need to put down a deposit and could also borrow extra secured on their home. Offering 125% loan to value mortgages are seen only part of the reason the bank collapsed, the main reason it is believed to the lender’s funding model. In the subsequent years after the Northern Rock crisis the numbers of mortgage products offered for customer wanting to borrow more than 75% of the value of their property died out, however the number of products slowly increased and with the assistance of the government’s Help to Buy scheme, since 2012 the number of 90 and over % loan to value mortgage products rose again.
Today, we can help source the market to find you a mortgage product and your affordability figure based on your income, deposit and credit history. Feel free to give us a call to discuss this further with one of our greatly experienced and qualified Mortgage Advisers.