Jackie Bennett, head of policy at the CML, pinned the blame for this on the media, saying: “Have we all been talking about the same thing? The media uses ‘sub-prime’ as a catch-all phrase. We need to be clear who is talking about what, how much they are talking about and what impact it will have.”
To combat the problem, the CML has created seven different categories of borrower, based on their credit status. It is encouraging lenders to report their data in this format to make it easier to segment the market consistently and quantify market sectors more accurately.
Bennett added: “We want to create standard industry definitions and be able to collect and report data effectively.”
She said a lot of work had already been done to engage with the media and try and improve consumer understanding, but that there was a long way to go before everyone was speaking the same language.
Looking to the year ahead Bennett said both lenders and brokers had work to do when it came to their respective requirements to lend responsibly and keep their records in good order. She also highlighted the question of affordability and questioned the view of some lenders and brokers in the industry who believe they can pass the buck from one to the other.
Bennett said: “Affordability is something that both intermediaries and lenders have responsibility for and they cannot offload this on each other.”
