Risky loans returning to UK housing market

[LONDON] The risky loans that helped cause the UK's property crash are making a comeback as cash buyers from abroad limit lending opportunities in London and banks instead venture into the weakest markets.

Five years after Royal Bank of Scotland Group plc and Lloyds Banking Group plc, the UK's biggest mortgage lender, were bailed out by the government, the number of mortgages with down payments of 15 per cent or less rose almost 50 per cent in August from a year earlier.

In London, where prices are rising fastest, only one in 25 borrowers took out a low down payment loan. In the north of England, the country's most-volatile housing market, it's about one in five, according to property appraisal firm e.surv Ltd.