November 28, 2007 | posted by Michael Baxter in IABN |

“The focus over the last few months has very much been on subprime borrowers, but they are only the tip of the iceberg,” said Mintel yesterday.

And with those words Mintel put the Fear Of God up the UK property market.

Mintel reckons 9 per cent of mortgage holders in the UK are subprime, but that another 24 per cent were non-standard with irregular incomes.

And that’s a problem, says Mintel, because when these mortgageholders come to move, and need to get a new mortgage, or if they want to re-mortgage their property, they are going to find it a whole lot harder and more expensive than they were expecting.

“In today’s more-conservative lending climate, the unconventional financial situation of these homeowners means that they will now face higher repayments and increased lenders’ fees when remortgaging or moving house,” said Mintel.

It does seem to us that many economists have underestimated how serious the current credit crunch is. If you remove from people the ability to borrow in order to repay borrowings, then all of a sudden you may well find a rapid rise in possessions, which in turn could lead to a rush of cut-price properties coming on the market.

2008 is likely to see this partially reflected in house prices, but given the time lags entailed in property possessions, 2009 may well be the year when things hit bottom.