Secured personal loans UK market slowdown predicted

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Mon, 19 Sep 2005

Secured personal loans seem to be losing its appeal for homeowners, new research suggests.

Datamonitor predicts a drastic fall over the next five years in the number of secured personal loans being taken out in the UK.

The slowdown in the housing market is expected to have a knock-on effect on the number of applications for secured personal loans, the market analyst suggested.

Even though the secured personal loans UK market has shown 50 per cent year-on-year growth over the last five years, Datamonitor believes that this will change dramatically.

Between now and 2009, the analyst believes the secured personal loans UK market will show only 5.3 per cent growth a year.

"As the UK's housing market slows to a soft landing, the rapid growth rates the secured lending market has enjoyed over the last five years are set to cool," commented Maya Imberg, financial analyst at Datamonitor.

The findings by Datamonitor are echoed by a report by the Centre for Economic and Business Research that suggested for the next five years, house prices will not rise again.

Nationwide also reported that growth in house prices fell from a high of 20 per cent in July last year to 2.6 per cent this year, making secured personal loans a less attractive option when taking out a personal loan.

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