Two thirds of sub-prime products have vanished in the last six months, according to research from Moneyfacts.co.uk.
Moneyfacts.co.uk says the credit crunch has virtually destroyed the sub-prime buy-to-let market and made a significant dent in the residential market.
The research shows 63% of sub-prime residential and 89% of sub-prime buy-to-let deals have disappeared from the market since July.
The figures represent a further 20% sub-prime residential product loss and 62% sub-prime buy-to-let deal loss since last month.
Julia Harris, an analyst at Moneyfacts.co.uk, says: “Not only have providers withdrawn significant amounts of products, rates have been hiked and criteria significantly tightened. It seems that the only way for the sub prime market to survive is for lenders to take a radical look at their approach to the market.
“With the sub prime buy-to-let market already virtually destroyed, it surely cannot sustain much more pressure before it vanishes. The next few months will be interesting to watch. In less than a year the sub prime market has grown, flourished and is now wilting fast.
“If the market fails to recover in the longer term, borrowers coming off a sub-prime fixed term deal in the next year or two could be placed in a difficult position, especially if their financial position has not improved sufficiently to allow them back into the prime market.”
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