The sub prime home loans market will continue to grow over the next few years, in response to the alarming amount of consumers who are sinking under the weight of personal debt.

The UK’s mortgage body has recently announced that Britain’s economic climate is having a serious effect on the housing market. One of the most obvious examples of this can be seen through the increasing number of FTB’s who are having to source mortgages up to 4 times their annual income. The sub-prime market had grown by more than 25% in the last year and is said to be valued at around £25 billion, however analysts expect market value to reach £32 billion in as little as 5 years.

Healthy economic conditions over the last decade have fuelled 80% of total sub-prime growth. The housing market has been particularly rewarding for homeowners and interest rates have remained relatively low, this is turn had increased consumer confidence which had spurred consumer spending. As a natural outcome of increased spending, consumer debt has also skyrocketed which has pushed many people into the sub-prime band.

Analysts fear that the UK sub-prime market is running the risk of becoming unstable and possibly following a similar course to the US. British based sub-prime lenders have snubbed such fears, stating that their qualifying criteria are far more stringent.