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The Significance and Implications of Being a Subprime Homeowner in the UK

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  • Kevin Keasey
  • Gianluca Veronesi

Abstract

The purpose of this paper is to provide a deeper understanding of the significance and implications of being a subprime homeowner in the UK. The results indicate that subprime individuals represent a mixture of socioeconomic groups, predominantly included in the light adverse and near prime categories of subprime lending, for whom credit adversity is generally a temporary phenomenon, which is likely to represent a transitory event in their lives. These borrowers have been at the heart of the UK subprime mortgage market, actively targeted not only by specialist lenders but also, more crucially, by mainstream players. Whereas for some individuals this market has provided an opportunity to experience the emotional and financial aspects of homeownership positively; for others becoming a subprime mortgage holder has increased the difficulties in their lives, affected their financial capability, and worsened their standards of living. Thus, the impact of the risk—reward mechanisms of subprime products has proved to be a difficult reality for certain socioeconomic groups. Furthermore, given the progressive deterioration in the transparency of the financial services industry, a significant proportion of subprime individuals has, unsurprisingly, struggled to appreciate the reasons why they faced problems in obtaining credit or a mortgage.

Suggested Citation

  • Kevin Keasey & Gianluca Veronesi, 2012. "The Significance and Implications of Being a Subprime Homeowner in the UK," Environment and Planning A, , vol. 44(6), pages 1502-1522, June.
    • Handle: RePEc:sae:envira:v:44:y:2012:i:6:p:1502-1522
    DOI: 10.1068/a44453
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    References listed on IDEAS

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    1. Shaun French & Andrew Leyshon & Nigel Thrift, 2009. "A very geographical crisis: the making and breaking of the 2007--2008 financial crisis," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 2(2), pages 287-302.
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    4. Andrew Leyshon & Dawn Burton & David Knights & Catrina Alferoff & Paola Signoretta, 2004. "Towards an Ecology of Retail Financial Services: Understanding the Persistence of Door-to-Door Credit and Insurance Providers," Environment and Planning A, , vol. 36(4), pages 625-645, April.
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    Cited by:

    1. Adriana M Soaita & Beverley A Searle, 2016. "Debt amnesia: Homeowners’ discourses on the financial costs and gains of homebuying," Environment and Planning A, , vol. 48(6), pages 1087-1106, June.
    2. Ariane Hillig, 2019. "Everyday financialization: The case of UK households," Environment and Planning A, , vol. 51(7), pages 1460-1478, October.

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