"The self-employed, those working in the gig economy, and people with irregular sources of income are suffering the most."
The bridging lender surveyed 752 UK adults who had applied for mortgages in the past five years. 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 pay-check. 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.
50% relied on a broker to find their loan and 59% feel mortgage providers need to be more flexible in assessing applications to take into account an individual’s full financial circumstances'
28% are dissatisfied with the experience they have had with their current mortgage provider.
Kynan Benjamin, head of underwriting at KSEYE, said: “Given how busy and competitive the UK property market has been over the past 12 months, the mortgage industry has come under scrutiny. And understandably so, with our research highlighting just how difficult it can be for individuals to jump through the necessary hoops to secure a mortgage.
“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.”
