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Anyone that knows anything about the last financial crisis and the role that sub-prime mortgages played will understand why the Bank of England has called for stricter lending criteria over the past few years.

The ability for people to mortgage beyond their means, 110% mortgages, dubious credit checks is a place no one wants to see the UK property market return to for everyone’s sake.

But, are there signs that this may start happening all over again.

New research by peer to peer lending platform Lendy, says Croydon has seen a 35.6% rise in the number of high-risk mortgages, up from 309 in 2015.

Under Bank of England guidelines, mortgages are considered ‘high-risk’ when 4.5 times a person’s salary or above.

In the the UK, 88,057 high-risk mortgages were issued last year, 8.1% of all home loans. The percentage of high-risk mortgages taken out in Croydon was more than double this at 16.5%.

Croydon is establishing itself as a leading hub for technology companies and putting itself on the map as a place to be, driving up house prices and meaning buyers are pushing the financial limits to live there.

Lendy, commented: “Croydon has reinvented itself as an up-and-coming business and technology hotspot with all the trappings of success like fintech companies and the Boxpark. Homebuyers are now really stretching themselves to live there.

“Investment in the town has improved transport connections and opened Croydon up for growth, as its proximity to Gatwick and London allows easy links to international and European trade markets.”

“However, bank lending to property developers has fallen, and it is the smaller housebuilders being hit hardest. As a result, we are seeing more and more of them look for alternative ways of funding their projects, such as peer-to-peer finance.”

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