Cabot Chief Sees More Debt Sales in the UK

The United Kingdom’s “love affair with cheap credit” may be coming to an end following five interest rate hikes in a year and a cooling in property prices, writes Ken Maynard, CEO, Cabot Financial (Europe) Ltd., in the January issue of Credit Management magazine.

The credit crunch is hitting the U.K. much like the U.S. with lenders tightening lending policies, according to Maynard’s column “The Changing Face of Debt Purchasing,” in the monthly magazine published by the Institute of Credit Management, a trade organization for credit professionals in the U.K.

Maynard predicts that these economic pressures in 2008 could convince lenders to sell some of their debt. And an increase in the supply of debt could lower “over-inflated prices we have seen recently for portfolios, with rises of more than 50 percent over the last 24 months,” he writes. Then again, an increase in supply may bring more buyers into the field, and that will keep prices high, Maynard writes.

Maynard notes that the U.K. debt purchasing industry is in a flux, as evidenced by the announcement in 2007 that the Lowell Group is up for sale, and the rumors that owners of 1st Credit may be considering something similar.