A quarter of the 1,500 surveyed claim that the MMR has impacted their ability to buy a property, while a further third (37%) report that the changes have made them feel less in control of securing a mortgage, according to research by Experian.
Additionally, among those who were unable to buy since the introduction of the MMR, many still appear to be overlooking the basics in financially preparing to apply for a mortgage. Almost half (46%) have never checked their credit report, meaning they have no indication of how a lender might view their ability to repay money.
62% were not aware that lenders may require bigger deposits - in fact 23% believe they could apply for mortgages with smaller deposits than before.
An additional 15% mistakenly believe that lenders have now relaxed their lending criteria as a result of the MMR.
In addition, of those who were unable to buy in the last year:
- 13% do not know how much money they have left over at the end of the month;
- 18% don’t even know what monthly repayments they can afford;
- 14% did not have a big enough deposit for the property they wanted;
- 12% were unable to secure the size of mortgage they needed.
Worryingly, 11% of those who were unsuccessful did not know why or haven’t asked their lender, leaving them at a significant disadvantage when it comes to improving their chances of being accepted in the future.
In a separate study conducted by Experian in April 2014, just 44% of those surveyed were aware that the MMR would mean that lenders would be more careful about ensuring mortgage applicants could afford their repayments.
Guy Shone at ExplaintheMarket, commented:
”We’re now one year on from the MMR and it seems many people remain stuck in a bit of a muddle. More needs to be done in 2016 to encourage personal financial planning and properly support aspiring home buyers, so that all buyers fully understand the rules of the game – and stand the best chance of securing a property they can afford."
