Nov 18, 2021 - 08:48
One in three mortgage customers in the UK were rejected by lenders during the process of applying for loans, research from KSEYE has found.
The bridging lender’s survey of 752 UK adults, all of whom had applied for mortgages in the past five years, uncovered the trials and tribulations they have faced when applying for their loans.
It found that 68% were successful at their first attempt, while 32% were rejected on at least one occasion. Of those who were rejected by lenders, 44% said it was due to having an irregular income rather than a monthly paycheck. Some 30% were self-employed when rejected for a mortgage.
More than a third (36%) of those who were turned down by a lender said that they were never told why their application had been unsuccessful. Almost half (46%) had received an agreement in principle from a mortgage provider, only for the company to later reverse their decision.
According to all respondents, 50% relied on a broker to find their loan. However, 28% are dissatisfied with the experience they have had with their current mortgage provider.
KSEYE’s research also showed that 59% of mortgage customers feel that lenders need to be more flexible in assessing applications to consider an individual’s full financial circumstances.
“Given how busy and competitive the UK property market has been over the past 12 months, the mortgage industry has come under scrutiny,” Kynan Benjamin, head of underwriting at KSEYE, comments.
“Clearly, the inflexible application process that many lenders rely on is precluding some people from getting onto or moving up the property ladder. The self-employed, those working in the gig economy, and people with irregular sources of income are suffering the most.”
“So, it is of little surprise that the specialist finance sector has seen an increase in applications in 2021. Those keen to purchase a property, particularly during the stamp duty holiday, have had to consider their options – for some, as the data shows, mortgages are not always viable, and so greater flexibility or a more bespoke option is required.”
Source: Deborah Lewis @ Introducer Today