"It is concerning that so many people in the UK have made the conscious decision not to apply for a mortgage due to the fear of being rejected, despite being in a financially secure position."
The survey of those traditionally underserved in the mortgage market - people who are self-employed, have a blip in their credit history or have no credit history - reveals a significant amount have not taken the first step to get onto the property ladder due to the fear of being rejected (26%). This is followed by worries about the pressure the application journey will cause (23%) and concerns of how the process will impact their credit score (23%)
This comes at a time when over three quarters (78%) of those who have traditionally struggled to secure a mortgage would describe their financial situation as secure.
The challenges these respondents face also extend beyond the mortgage industry, with almost half of respondents (48%) believing they have less financial choices than others, due to them not fitting the ‘vanilla’ criteria of mainstream lenders. A similar proportion (46%) feel that financial organisations do not understand their situation, increasing to 85% among those who have missed a payment that has impacted their credit score.
Steve Seal, CEO of Bluestone Mortgages, commented: “It is concerning that so many people in the UK have made the conscious decision not to apply for a mortgage due to the fear of being rejected, despite being in a financially secure position. This is a result of people with different financial circumstances being negatively labelled and deemed ‘unlendable’ by the mainstream mortgage market.
“Looking ahead we will see a growing cohort of people who do not fit traditional lending criteria due to the financial impact of Covid-19 and the rising cost of living, and it is vital that these individuals do not give up on their homeownership dream when mainstream lenders’ computers say no.
“It is important to remember that there is help at hand and this is where the specialist lending market has a crucial part to play. With their individual approach to underwriting, these lenders can assess customers on a case by case basis and provide them with an opportunity to get onto the housing ladder. However, many people are often unaware of the options available to them, especially if they have been turned away. It is therefore the responsibility of highstreet lenders to signpost these customers to the available options, to ensure that they can make their homeownership dream a reality.”
