Brokers securing mortgage for those turned down by banks

| November 20, 2012
Brokers securing mortgage for those turned down by banks

Mortgage brokers are successfully securing mortgages for 29 per cent of those who have had their application rejected by a bank, according to a study by property group Countrywide and YouGov.

The main reasons for banks rejecting mortgage applications were insufficient earnings and income, and a poor credit score, the study found.

It identified a number of significant barriers to recovery in the housing mark and factors affecting consumer confidence since March 2012.

Nineteen per cent of people aged between 35 and 44 years said that job insecurity was their main reason for not buying a property, while this fell to 12 per cent among adults of all ages.

Eighteen per cent of younger people, aged between 25 and 34 years, said they were holding off from buying a property because they could not afford the mortgage repayments.

Sixty-three per cent of those living in private rented accommodation said high mortgage deposits were preventing them from buying a property, compared with 56 per cent when the previous survey was carried out in March.

In the 18 to 24 age band, 35 per cent are living in private rented accommodation.

Nine per cent of unsuccessful mortgage applicants were turned down because of their self-employed status, while 11 per cent were not given a reason for their application being rejected.

Grenville Turner, chief executive of Countrywide, said: “Banks need to be encouraged to lend at more favourable rates with the introduction of higher loan to value mortgage products to enable prospective buyers with a deposit of 10 per cent or even 5 per cent to get on the property ladder.”

“The issue of deposit affordability remains the major barrier to purchasing a home for renters and we have been calling for some time now for meaningful mortgage targets, to strong-arm higher loan-to-value lending, he continued.”

The latest figures from the Council of Mortgage Lenders reveal a 14 per cent increase in gross mortgage lending to £12.9 billion in October, from £11.3 billion in September.

This was 4.9 per cent higher than the £12.3bn advanced in October 2011.

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