Consumers expecting to be refused mortgages

The Building Societies Association’s (BSA) quarterly Property Tracker has shown that whilst the availability of mortgage finance has improved, consumers are still expecting to be refused finance.

The survey of 2000 consumers showed that access to mortgage finance is one of the largest barriers to property purchase.

However 46 per cent said it was a problem compared to 59 per cent in September 2011.

The Property Tracker found that very few of those who were worried about being able to get a mortgage had actually tried.

Just three per cent had applied for a mortgage and been turned down, and four per cent had spoken to a broker or lender and concluded they might not get a mortgage.

21 per cent said the main reason they were put off was that they had concerns that their income was not high enough to borrow as much as they would like.

16 per cent said they were put off by news stories reporting a lack of mortgage lending by banks and building societies.

16 per cent had concerns that their deposit was not large enough and 14 per cent said it was because of a fear of being turned down for a mortgage.

Paul Broadhead, Head of Mortgage Policy at the BSA, said: "Results from our Property Tracker report indicate that the barriers to purchasing property may be largely down to perception, rather than actual experience.

“Although mortgage availability has undoubtedly reduced since the start of the financial crisis, some lenders such as building societies and other mutuals have actually increased their lending to all types of borrowers, including first-time buyers, over the last year or so."

Mr Broadhead urged homebuyers not to discount themselves without checking with lenders first.

Today's Conveyancer